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In answer to both questions, a I would retain useful items when needed. There are so many quests that will net you a point of rep it is insane, and often the items (well... depending on the quest) are worth more than the point of rep would cost at a temple, either through cash value or usefulness.
As for the second one, I have said it before and I'll say it again. It is a misconception that all evil characters are despised and slaughter innocents everywhere they go. Evil means that they do what is best for them and that they are willing to put others at risk or manipulate events to gain that. Hell, look at Bill Gates...
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"Beware fool that you put too much stock in the power of the spoken word, lest the unspoken one trample you from behind."
Kormar
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