The effects of faction have been coded. As you'll notice, right now there is only a negative side to it; that's because we haven't hammered out any positive benefits just yet. We'll get to those soon.

http://www.rohonline.net/help/faction/

So far, only Gnomebarrow has faction set on it. Oakspire will be next, and then most likely Highport, although that one will be tricky (since there are several factions within the city).

I think a cool faction bonus would be to let us in the gates for free and at anytime.

I set it up so tollkeepers respond to faction as well and use the same rules for business (increased toll cost for bad faction, decreased toll cost for good faction when we code it).

Positive effects could be like cheaper prices in shops, faction based weapons sold in shops, faction based armor. Titles for reaching certain faction.