well.
1=Yes there is a penalty, your name goes pink
when you attack someone,
meaning for a short time any other player can attack or kill you.
Now if you manage to kill someone then your name goes
red and you
become a murder.
At this point you can and will be killed by any player that sees you, and every
time you die you will drop an item. This penalty will last until you
have been killed a certain number of times or have killed a certain
number of monsters.
2=when you die you dont normaly drop an item, unless you were
a murder at the time.
