Alrik,
It's impact that determines reputation. I love the idea of taking prisoners, I must admit, and the removal of the bandits by
any method will please the villagers just as much I have no doubt. The inclusion of a magical prison which you could carry around to keep prisoners in is something I have wanted to see in a CRPG for a long time.
I also like the idea of being able to bribe or trick the bandits into going after the Orcs (To borrow the setup in your example) - thereby causing significant damage to both sides and making your own life a lot easier.
The idea of giving EXP for 'defeat' rather than 'death' is a good one and would allow for many variances.
I see no reason why your reputation gain should be less for any of these methods than for any other.
The 'peacemaker potion' strikes me as too easy a solution, though. I prefer to try persuading the Orcs to make peace - although your potion DOES open the rather interesting question of a load of vengeful humans now going after the Orcs once they are incapable of fighting back... What would the hero do about that, considering he caused the situation in the first place? Hmmm...
These ideas are all easy enough to implement in a proper RPG, because the GM is human and can adjust to any sneaky plans the players come up with. But I'm not sure they have the technology to do it with a computer yet, sadly. Which is why most CRPGs are all about the killing. I'll love it when they do, though
