If you cast Poison Cloud near an NPC, but not directly on them, they will take damage but not turn hostile. You can kill many NPCs this way without them attacking back or loosing reputation points. Most essential NPCs are protected from being killed (more were added to that group in the patch).
Alternatively, Seth sticks around until the healers move, so you can level up a bit and get better equipment if you want more of a fair fight.
Barta;
The name colours are based on the quality of the item, which is random. I've gotten a white named Nobelman's sword, though it is most often orange.
You need to deliberately misspell the word, or something, if you want to post about a bas.tard sword.