1. Ability scores generation method?
You got two options: 4d6 rolled in my presence, discard the lowest, assign as you please. All ability scores must be +4 in total or better. Second option: 45 point buy using the following table:
Score / Cost
5 0
6 1
7 2
8 3
9 4
10 5
11 6
12 7
13 8
14 10
15 12
16 14
17 17
18 20
2. How are death and dying handled?
RAW.
3. What about raising the dead?
RAW. Clergies are very protective for their spells and all of them fight for worshipers, so if you are not one of the faithfuls you will have tough time finding someone to cast Raise Dead.
4. How are replacement PCs handled?
Usually a short delay while the remaining PCs are looking for new heroes. Delay is dependent on their level. Finding a 7th-level PC in a kingdom of 100k people is going take a week, maybe two or three.
5. Initiative: individual, group, or something else?
Individual. Cohorts, companions, familiars and such act on their "master's" initiative.
6. Are there critical hits and fumbles? How do they work?
You don't need to confirm crits. Strength damage is not multiplied. On a natural 20 you roll either 1d8, 1d10 or 2d6 depending on the weapon size vs. size of the target. You may get all sort of special results, such as severed nose. Usually Fortitude save DC 20 saves you from trouble. Fumbles are 1d100 roll, using different tables I have made. Using firearms and splash weapons result extremely bad fumbles, but otherwise deadly fumbles are unheard of. After 50 sessions no one has died from a fumble or gone to negative hp. 5th-level single class fighters have special immunity against fumbles, but they forget this edge if they multiclass (God I hate dipping!).
7. Do I get any benefits for wearing a helmet?
Yes, with certain criticals you get immunity if you have a helmet. Such occasions rarely come up. 3-5 incidents per 50 sessions.
8. Can I hurt my friends if I fire into melee or do something similarly silly?
If you refuse to take -4 penalty for melee, I will give 20% chance to hit a friend. Otherwise we go by the fumble-rules. With my fumble-rules people have hit a friend maybe a couple of times per 50 sessions. One of them however caused over 30 points of damage!
9. Will we need to run from some encounters, or will we be able to kill everything?
Running hasn't been the only option. So far all encounters have been defeatable (is that even a word?) and few have been especially tough.
10. Level-draining monsters: yes or no?
If PCs have access to Restoration: Yes.
11. Are there going to be cases where a failed save results in PC death?
No. Can't think of any. The level of magic hasn't been very high so far.
12. How strictly are encumbrance & resources tracked?
Players have to remember this, I can't follow it. I try to remind them about it though.
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?
You have to sleep in a 100% peaceful environment for at least 8 hours and next morning talk about the experiences together. Multiclassing will require months of training. Taking the first rank in "trained only" skills will require training.
14. What do I get experience for?
Mainly RAW, but I tend to give mission-XP for successful adventures. In my game adventuring group with three 100% successful adventures has more XP than a group with four nearly successful adventures (assuming the encounters are identical).
15. How are traps located? Description, dice rolling, or some combination?
I ask how they are going to proceed. Taking 20 or not. Taking 10 with traps is not possible because it's a stressful situation where one feels threatened by the fact that you could die in an instant if you fail.
16. Are retainers encouraged and how does morale work?
No, I don't encourage them. I dislike DMPCs. PCs should be independent. Morale is usually a DC 15 Will save if half of the group is dead or if the group's leader dies while the company is facing heavy resistance.
17. How do I identify magic items?
Cities have wage-mages that can cast identify. They usually take some extra gold unless you are somehow connected with the right people. Everyone is greedy.
18. Can I buy magic items? Oh, come on: how about just potions?
Wage-mages are few and far between and they are strongly monopolized. Clergy of Boccob fights against magical item business to stop commercialization of magic. All clergies want you to be a worshiper before they will co-operate with you in any way. Mages are regularly employed and don't freelance. All in all, you have much better chance of buying an arcane item then a divine one. Also important: Everyone is scared shaitless of cursed items; they are taken VERY seriously.
19. Can I create magic items? When and how?
RAW but good luck finding materials worth 1000 gp or more. They are heavily monopolized and often extremely exotic. Longsword +1 weights 4 lb. but still you need 1000 gp worth of materials. We are talking about very specific and pricey materials that don't grow on trees. If you want them in a hurry, like within one month, you are going to have to pay some extra.
20. What about splitting the party?
Your chances of getting killed with increase astronomically.