Skyrim - Fan Interview @ Bethesda Forums

Todd Howard, Brusce Nesmith, Matt Carafano, answered questions from fans in this interview put up by Matt Grandstaff at the Bethesda forums. A few samples:

5) Are loot and quest rewards level scaled, like in Oblivion? Will there be any powerful un-scaled items?

Bruce: We’re handling leveling stuff similar to how we did in Fallout 3, but with a few new twists that we hope players won’t even notice. The enemies and loot are based on the “encounter zone” you’re in, so it could be higher or lower level than your current level. We do have a new concept of epic or “special” loot that you can randomly find in many cases, regardless of the zone, and you will still get better stuff in the better zones with your level higher. Same goes for quest rewards. We try to make them appropriate for what you did. Sometimes that is random, sometimes that is a set item. There’s a lot of specific stuff that is very powerful, like the Daedric artifacts.

Another quote:

20) Will any sort of karma system be incorporated like there was in Fallout, or will it be the Fame/Infamy system of Oblivion?

Bruce: We don’t provide a numeric score that you can track, but the game knows if you’ve been naughty or nice. We felt that a number really didn’t do your fame justice. Characters in the world will acknowledge the specific things you have done rather than just a generalized reputation. If you are a criminal, they’ll know that too. But if you pay your debt to society, all is forgiven.