Varlag? Vargul? Whatever his name is, you can kill him. Doesn't affect your game in the slightest (unless he's the bartender, in which case you want to get some Boogre Brew beforehand).
We (as in the collective consciousness that marks the Ironworks Forums' elite intelligentsia, or said another way, the people who agree with me [img]smile.gif[/img] ), believe that had the game not been rushed out, there would have been real significance to your actions. If you broke the Mavin Oath, if you killed certain powerful and ancient woodland NPCs, if you acted out of character, then there would have been some repercussions to your moves. Unfortunately, they had to rush the game to market, and those kinds of things got dropped. I agree with you -- the world reacting to your actions is part of the fun of gaming.
So, until we get to the next game, you can pretty much do what you want. Just make sure you've completed all quests and activities related to a particular NPC or race... it'd be hard to complete the "Stout Clan Invitation" quest if there ain't no more stouts
