Thus far, the game with my little group has been more about finding our dungeon-legs in a series of pretty random scenarios rather than a coherent campaign. Hopefully that's about to change...we haven't played in a few months, and during the hiatus I've been mentally building a nice little sandbox world, where we can play with some consistency and continuity of setting. As I gear up to launch into this brave new world, I'll take the opportunity to answer a few questions...specifically, the 20 rules questions posed by Brendan.
Ability scores generation method? 3d6 in order. If you don't like the first results, you can roll once more, but consider carefully. If you roll again, you're stuck with those results, and you can't go back to the first set. You don't have much to lose by rolling again if your first character really sucks, but scrapping an average or better set of scores for another try is pretty risky.
How are death and dying handled? Zero hp is unconscious. Below that, dead.
What about raising the dead? No raise dead or resurrection spells. There are legends of the dead being restored to life, but if any means of doing so truly exists, it's been lost somewhere in the depths of history...
How are replacement PCs handled? Start from first level. They'll catch up. Alternately, promote a henchman to PC status.
Initiative: individual, group, or something else? Group.
Are there critical hits and fumbles? How do they work? Critical hit on a 20 (19 or 20 for fighter types), roll twice for damage and take the higher roll. We'll also be using the simple combat maneuvers from Telecanter's house rules so a critical may have other effects too. Fumbles on a natural 1, lose your action for the next round and roll for possible weapon breakage.
Do I get any benefits for wearing a helmet? Your AC is one point worse if you don't.
Can I hurt my friends if I fire into melee or do something similarly silly? You certainly can. Other combatants in melee act as cover for your chosen target. If your attack misses, but would have hit without the penalty for cover, you hit an unintended target.
Will we need to run from some encounters, or will we be able to kill everything? I believe I've made my views on encounter balance known. Cardio: It's not just for Zombieland!
Level-draining monsters: yes or no? Used sparingly, but yes. Undead are supposed to be scary.
Are there going to be cases where a failed save results in PC death? Yes, but alert players will have ample opportunity to avoid them. A saving throw is a last chance to survive a serious blunder.
How strictly are encumbrance & resources tracked? Encumbrance, fairly roughly. Armor and big items will be tracked; smaller items tallied only if a character is carrying what looks like an excessive amount. Resources like food, oil, and torches will be tracked fairly closely.
What's required when my PC gains a level? Training? Do I get new
spells automatically? Can it happen in the middle of an adventure, or do
I have to wait for down time? Reach a place of safety to rest and reflect on your experiences. If that's in the middle of an adventure, so be it, but a camp in the middle of a wilderness or a barricaded dungeon room does not qualify. Spells, whether magic-user or cleric, must be learned from a mentor, books and scrolls, or independent research.
What do I get experience for? Defeating monsters (not necessarily killing them), recovering valuables, attaining personal goals, and particularly awesome and/or entertaining acts of heroism and role playing as decided by group consensus.
How are traps located? Description, dice rolling, or some combination? Description and careful observation. Anyone can find traps by taking the right actions and asking the right questions. Thieves get their Find Traps skill roll as a saving throw to avoid traps that nobody spots by the first method.
Are retainers encouraged and how does morale work? If the players want retainers, they can certainly attempt to recruit some. Retainer morale is checked only in special circumstances during adventures, and at the end of the adventure to see if the retainer will continue to accompany the party on further adventures.
How do I identify magic items? Through use, by trial and error, or by consulting a sage, a library, or other source of historical and legendary knowledge.
Can I buy magic items? Oh, come on: how about just potions? Not as a matter of course, but you never know what you might find on the pawnbroker's shelves. Some non-magical but helpful concoctions are available from herbalists and apothecaries.
Can I create magic items? When and how? Spell casters may attempt it at name level, as per the rule book.
What about splitting the party? Not generally advised, but if you really want to, go for it.