You can't have moral issues in a game when the player just saves before fights or before important dialogues so that they can try it again if they don't like the outcome.
The only way I can see to prevent this being an issue is to make it clear up front (or at least, intuitive) what the difference is, and then balance the payoffs. People would do the first couple of fights and reload to see the difference. Heck, maybe they'd even read the rulebook that explained it. And then they'd get on with the game once they understood how combat worked.
It's easier in a system like Oblivion's, where you exercise specific skills, rather than just earning generic "XP". Then you can have a system like:
Each character has a store of XP: you can't earn more XP off him than his store.
If you convince a foe not to begin combat, you exercise your speechcraft or animal-handling or whatever.
If you enter a fight, you exercise your combat abilities.
If you kill someone, your weapon abilities get exercised more, and your number of kills increments.
I think perhaps a death should give a certain amount of combat experience, even if you have used up their XP store through other actions.
If you spare them, surrender, flee, or talk them round, you only exercise your weapon skills proportional to the damage you did before you stopped.
Fleeing exercises athletics skills.
Talking them round exercises speechcraft/animal-handling, but less than if you avoided the combat entirely.
Surrendering/sparing exercises no skills and gives no bonus: the only payoff is, someone's not dead.
If anyone saw a deed, or the NPC survived the battle, the deed's considered "reported".
For reported deeds, apply the NPC's defined values for that deed to your reputation network, scaled by the XP you earned from the deed.
Looks complex, but should be fairly intuitive. Easier to understand in play, than it is to explain in speech, hopefully.
Sure, that's more work for the game designer but so what? If a game designer could manage to implement such a degree of freedom in the game, I would buy it no matter what. <img src="/ubbthreads/images/graemlins/winkwink.gif" alt="" />
Yup <img src="/ubbthreads/images/graemlins/smile.gif" alt="" /> Just ordered Planescape:Torment, though it looks like I'll be ordering DD after that - I'm
really liking what I hear <img src="/ubbthreads/images/graemlins/biggrin.gif" alt="" />