You know I read this thread months ago and never realized it was the Shil I knew (just didn't pay enough attention to the poster name). I just did tonight when he e-mailed me with another story update. So here is my take, based on arguments:
Drinking - There is nothing in the rules saying a paladin could not drink or even get drunk. If you want to go by the RAW, the only place I can find this mentioned in official WoTC material is Defenders of the faith Side bar: "Paladins should avoid drinking too much since it impairs their readiness to combat evil" First things first, it says "should" it does not describe an absolute. Second it says "since it impairs...." - if the person knows how to drink and handle their liquor they have no concerns.
Some might say "what if the paladin starts a brawl." Well that is a different issue. I can say, from experience, that drinking does not mean I am going to start a fight. Trust me I am willing to fight (I used to box in college). When I am drunk I am still willing to fight - but I know how to control myself even when blasted drunk.
Cursing - Yea everyone curses and that is a personal choice. Maybe, and i emphasize maybe, if the paladin curses his god there would be some reprocussions, but in all honesty I would treat is as "The god looks down, shakes his head, sighs and thinks 'i really gotta raise my paladins to be a bit less abrassive, well as long as the job gets done and they are not doing anything really bad'"
Prostitution - You guys realize that up until about one hundred years ago (really less) prostitution was perfectly OK and legal in the US? It is only not legal because of religious institution influence - and that is not all religions. Prostitution is a state law, not federal law. Yes there are the places in this world that have slaves - but Shil did not write about such a place. He wrote about an acceptable brothal (just like those you can find in Nevada, though there are other happy brothels). Also, you really shouldn't compare our modern day beliefs to beliefs in (around) the dark ages. Brothels were perfectly acceptable. They were established institutions that provided a service. Not all prostitutes are rude or evil, some are very nice women who are happy to make thousands of dollars every week, if not every night!!! Shil's story did not mention children, did not mention forced servitude.
So would I allow this yes, would I try playing this yes - though I might not do as good a job as Shil. I currently have a paladin in his game, but he is a goody good paladin - but that is because my last character was a slick salesman
If I had kids in my game I would not play this, luckily I do not, and luckily the people in my game can handle sexual content.
Anyhow, my three bits
-A
P.S. I will harp on Shil to write more stories, I almost had a tear come to my eye when the high cleric told Magnus the heroic stories (namely when the village was pillaged). I laughed when Cedric was "too pissed" at his god while carrying his comrade