As most here, I find it best to define bad guys according to some values. Being a baddie doesn't mean one will go around killing people for any reason whatsoever.
This is different from the first question, would the NPC baddie have it in him to kill someone cold blooded. I suppose this is as good a moment as any to make a roll (perhaps using WIS or something), and would work well in a climactic scene, with the DM rolling in front of the PCs to see if the baddie kills the hostage or not. Modifiers for alignment, experience and so on would be in order.
As for fighting to the death, well, I don't have that kind of problem, I don't play 3ed and the ADD2e rules for morale et al are quite good and intuitive. You don't need to use them all the time, but ocasionally using them, to surprise even yourself, works really well.
