This is an interesting idea. Here's some brainstorming:
Each character announces an action for the round. Nothing's set in stone, it's all out in the open, and it can be changed at this point.
Other characters can lend aid by making their own checks.
Once all the actions are decided on, all characters make opposed checks. Any skill or attack can be used; if an appropriate power is used, add a +2 or +4 bonus (generally speaking, encounter and daily powers) to the roll.
Whoever succeeds, whatever he was trying to do succeeds (save killing the guy or ending the duel right there). He trips, disarms, makes him see stars, gains a better position, figures out a weakness, whatever. As a rule of thumb, success will give the loser a -2 penalty or give the winner +2 bonus to the next roll.
Special: If the actions declared are not opposed to each other, each character makes a roll against an appropriate DC. Success and failure are determined as normal.
Complexity: Since we're using opposed rolls, drop the normal complexity stuff. (The only way I can think of doing it without opposed rolls is to add in a "who narrates?" function.) Each character needs 4 successes, modified by the difference in level (eg. a 4th-level character vs. a 6th-level character needs 6 successes). Elites add +1 to the number of successes needed and solos add +2.
This goes for all characters involved; if someone who's just watching fails too much, he can no longer lend aid, he's unable to influence the duel.
XP is awarded as normal for defeating a character of that level. (ie. 250 for a 6th-level character.)
Doing the same action more than once: This is lame, give him a penalty. Goes for PCs or NPCs.
Action Points: Spend one and make two actions per round. Both are opposed by the same check. If more than one character spends an AP, the extra action is resolved in order of the check result.
eg. Three characters are involved; the rolls are 22, 18, and 9. If 22 spends an AP, he can roll right away vs DCs 18 & 9. If 18 spends an AP, he rolls after the 22 action is resolved, but before the 9, rolling against DCs 22 (or the result of the AP, if applicable) & 9. If 9 spends an AP, it's resolved last, against DCs 22 & 9 (or whatever the results of the APs were, if applicable).
Simple case:
PC wants to stab him in the sword arm
NPC wants to beat the PC back, force him off balance
PC wins: NPC is stabbed in the sword arm, taking a -2 penalty to future attack rolls.
NPC wins: PC is forced off balance, giving the NPC a +2 bonus to a follow-up attack.
More complex:
PC wants to enrage the NPC
NPC wants to beat the PC back, force him off balance
PC wins: NPC is enraged, giving the PC a +2 bonus to his next attack roll.
NPC wins: PC is forced off balance, giving the NPC a +2 bonus to a follow-up attack.
In this case, both could succeed and both could fail.
Extra Complex:
PC 1 wants to stab the NPC in the sword arm
NPC 2 wants to force the PC off-balance
PC 2 wants to spot a weakness and tell PC 1
NPC 2 wants to accuse PC 2 of cheating, getting the guards to throw him out
Who rolls against whom: PC 1 & 2 roll against NPC 1; NPC 2 rolls against a set difficulty.
PC 1 wins: NPC is stabbed in the sword arm.
PC 2 wins: He discovers a weakness and PC 1 gains a bonus.
NPC 1 wins vs PC 1 & 2: He covers his weakness and forces PC 1 off-balance
NPC 1 wins vs PC 1 but not 2: He does not cover his weakness but forces PC 1 off-balance
NPC 2 wins: Guards come to drag PC 2 away.
NPC 2 fails: Guards scoff at NPC 2 and tell him to shut up.
edit: With thanks to Sorcerer and The Shadow of Yesterday.
