I've said on various occasions that I (personally, as it's my choice) don't use 1) KILL 2) DON'T KILL, HE'S OURS policy. It was effective in BBS times, first 5-6 months after opening the beta. It gets boring quickly, especially when guarding the town. Also, even trading demands more interaction, not to mention some events or just standing somewhere and chatting with random people.
Of course you DO know better how I play the game, than me. Right?
Namecolorizing doesn't have anything with roleplay. People are distinguished by nicknames and their reputation, not colours. When I see a player that I have no idea what faction is he from, I can ask him about it. Of course, he can lie, but also, he can get caught lying =) Namecolorizing again does the job for you.
Every now and again some people say some ridiculous things about "PK consequences". Then let me make things clear for you: "PK" don't care about consequences, if they just shoot everyone on sight. It doesn't matter if you have him green, red, blue or yellow, you'll still have to fight with him. And if you happen to guard a town, he might just as well come with some blunub 1 lvl char and you can never know about it. So again, what consequences?