there really isnt a "good" or "bad" character system really. some quests give you the option of working for 1 group or another, but overall your actions dont have a huge impact on other NPC interactions...
the only exception is if you go around and kill half the people of a city, and get a bounty on ur head, then the guards will try and arrest or kill ya.. that is about it...
i have brawled with NPC's in bars, then talked to them afterwards... tis the only flaw in this game really.