Forgive me if this has been asked before. Is my userID going to be the name everyone in-game sees? Or will my created character's name, be the in-game identifier?

You will name each of your characters what you will. It is that name that people will see.

That will be the name displayed when they are targeted. However, your ESO account username is whats shown in chat.

Really? That would seem rather confusing, trying to keep track who is who, especially in groups.

That is my understanding. I actually keep the chat window disabled so I cannot speak from personal experience.

Zone chat and such will be your character name. Guild chat will show up as your User ID

Makes sense... for legal reasons at least. Someone starts offending the Terms of Service, makes it easier for Zenimax to catch the culprit making racial slurs or whatever other abusive remarks.

I don't see how it would be hard for ZOS anyway. In GuildWars, I remember anytime I added a friend and they would switch to another toon, their name of whatever character I added them as appears with the other character in parenthesis. For example, lets say you added my GuildWars character but I am on a different character:

Liston Worrek (Lance Silvertrap)

GuildWars 2 has handles like ZOS is doing (account name appears in friend, guild, party) but not in chat. ZOS should stick to that naming method to keep track of players IMHO.

I think it works exactly like gw2. your character's name will be shown in chats. your account name will show in guilds. John Doe (El_Hefe)