Though I recently suspended the Skype campaign I've been running since 2010, I decided to answer Brendan's questions concerning how I ran my campaign and, hopefully, more or less how I'll run it again one day. In any case, it's likely to reflect the rules no matter where I'm running a table in the near future. Enjoy!
1. Ability scores generation method?
Player's choice between 3d6 down the line or making up whatever they want within ranges of 3-18. Thanks, Jeff, for that idea (and, incidentally, Brendan for bringing it to my attention).
2. How are death and dying handled?
If a major character hits 0 hp, they roll on The Table of Death, Dismemberment and Dangerous Damage. Each time they take a hit and are at 0 hp, they roll on the table again.
3. What about raising the dead?
Nope. The PCs probably couldn't afford it anyway at this stage in the game.
4. How are replacement PCs handled?
They show up, somehow, whenever the player rolls them up. Often they'll wait until the end of the session or the beginning of the next one. That's actually probably because my players usually play two characters at once so it doesn't get boring when one character dies.
5. Initiative: individual, group, or something else?
I have this really complicated initiative system that is based off of this. I'm considering replacing it with this.
6. Are there critical hits and fumbles? How do they work?
Yep. Roll a natural 20, roll on the Arduin Critical Hits table. Roll a natural 1, roll on the Arduin Critical Fumbles table. Same goes for monsters. Combat is deadly (actually, deadlier than Arduin was intended, as the tables were designed to be used with percentile dice and confirmations of criticals).
7. Do I get any benefits for wearing a helmet?
They come in very handy when you roll on the Table of Death, Dismemberment and Dangerous Damage.
8. Can I hurt my friends if I fire into melee or do something similarly silly?
Can you ever! If you fire into melee and miss, you roll to hit on another, randomly selected target. I've had characters fire into melee, miss their target, hit an ally, critically hit them and kill them.
9. Will we need to run from some encounters, or will we be able to kill everything?
10. Level-draining monsters: yes or no?
Strictly speaking, no. When the party does encounter monsters that normally drain levels, they will just drain XP instead, per Raggi's idea.
11. Are there going to be cases where a failed save results in PC death?
12. How strictly are encumbrances and resources tracked?
Not as strictly as I'd like them to be… I at least keep my players aware of them and they calculate them. It's just harder for me to figure out how far they can go in a dungeon during a certain length of time, to do that on the fly and actually run the dungeon. Tips on this would be appreciated.
13. 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?
PCs level up at the end of the session. No training is involved. If an MU is an apprentice, the master will send spells of the appropriate new level; otherwise the MU will have to procure them himself.
14. What do I get experience for?
Coin spent and sessions played.
15. How are traps located? Description, dice rolling, or some combination?
16. Are retainers encouraged and how does morale work?
Retainers are encouraged but seldom used; another side-effect of allowing players to run two characters at once, I think. Morale is another item I try to include in my games but don't often succeed at. I wish Swords & Wizardry included morale rules so I didn't have to look them up in other rule-sets.
17. How do I identify magic items?
Trial and error, a spell your MU has or taking it to another wizard, probably in a city, who is willing to identify it for you for a price.
18. Can I buy magic items? Oh, come on: how about just potions?
On a roll of 1 on a d6, Shrelft the Pilgrim Peddler shows up at the beginning of the session, selling magical items that you can't get anywhere else. They are usually minor, but are more than just potions and have definitely gotten PCs out of scrapes before.
19. Can I create magic items? When and how?
Yes. According to the LotFP:WFRP rules (and, when the campaign is re-started, according to the ACKS rules).
20. What about splitting the party?
I'd rather you didn't, but it's allowed. I'll bounce back and forth between the two sub-parties. Since this is on Skype, I don't worry too much about isolating players. My players are good players and usually play as if they didn't know what was happening with the other sub-party.