In Fable you have only thing that has a real effect on the game: fame/infamy and all that kind of thing. You are either good and thus everyone loves you, evil and so everyone fears you or neutral and no one cares about you.
I vaguely remember there being a fame rating.
In Fallout however you could be totally good, stacked up to here *points with a 10 ft barge pole* with good Karma (I.E You have done good deeds and word has gotten around) and yet be totally hated in one town because each town has its own independent "I do/dont like you" rating.
In Age of Wonders (TBS) you had a relationship number with members of other species that went up or down depending on your alignment and what you did to them. If you burn their towns and kill their people they naturally would not like you. If you were evil and they were pure good then they would hate you from the word "Go".
In The Elder Scrolls (I.E Morrowind, Oblivion) if you joined a faction your faction members would like you more while faction enemies would dislike you more.
In Dink Smallwood an old woman implies that she burnt your house with your mother inside because you killed her pet duck.
I reckon that all of these systems (With the possible exception of Fable because we don't want our people growing horns/halos) would be pretty good when mixed together. It covers cause-and-effect ("I'll never join you. You killed my father!"), Racial tension ("Oh great. Hippies" vs "Oh great, midgets") and keeping the whole heroic fame thing under control. (I.E You don't kill a minotaur for a small mountain village that no one has heard of and then become a hero everywhere you go. You might also be able to massacre an entire village and kind of get away with it.)