sorry for the multiple posts, but wanted to respond to as many comments as I can get to, though all were useful.
Sorry but I was away on vacation!
Rachndil - you had a long post and I will get to a few items:
1) first comment I agree we are simplifying the crits - alot - but the basic concept is there.
2) fighting not an option - I'm glad you said this because stupidly, I might have not considered it! Brilliant!
3) Clear good or bad - I agree, but I think my youngerst will even feel bad for the badies! Hence, I think encounters that do include fighting will be against things like rats and spiders and wolves and a few minor demons / undead. There is an evil person, but I dont think the result will be that she is killed but arrested.
more to come