Instead of a Karma system, why not add an additional Personal Belief's slider or some shit, with different bonuses.
Personally I'm ambivalent to the idea, but since everyone has their ass in a knot about wanting something pertaining to good and evil, make it pertaining to PvP only. Or not, it really doesn't matter.
For example, stupid shit like this to complicate the game further.
Evil:20-25% LP increase within an hour of Assaulting/Murdering someone. Obviously an issue here is alt-exploiting.
10% Damage bonus when initiating combat on another player.
Good:
Static 10% LP bonus. Lost for 1~ hours when combat is initiated. (This applies to Summoning, as how can the game tell?
20% Resistance/Defense/Armor bonus when defending yourself, bonus does not apply.
Obviously I'm not the best at ideas, but it would add something interesting to the game (and potentially once again silence those kiddies with a rod up their ass over how murder is no longer "profitable").