Too much Conviction?
First off, E6 sounds like a fantastic idea. When it comes to system tweaking, striking a balance between "what makes sense" and "playability" usually results in "too many house rules."
I personally have no experience running higher level D20 campaigns; in fact, I'm in the process of running my first 3.x game, and the PCs are around 4th level right now - which basically means I don't have a clear feel for the problems that E6 "solves" related to higher-level campaigns. I am, however, running in a low-magic, gritty setting that E6 seems to fit quite well.
I did want to sound off on the Death Flag rule. I LOVE it. In a world where resurrection doesn't exist, and having been a player who's put loving time and effort into developing a character, I am loath to allow PCs to die due to bad dice rolls; and yet, I feel guilty at times for fudging things so that the PC can be saved.
The Death Flag answers these concerns for me nicely; it gives the player control over the destiny of the character, and allows them the opportunity to choose to make heroic sacrifices at dramatically appropriate times.
The thing I'm not too sure about is the number of conviction points. 6 per game day seems awfully high to me. I was curious to know how this has worked out in your playtesting/gaming experience. It seems to me that unless you tend to have more than one combat encounter per day, it gives a distinct advantage to the PCs when each one can, for example, roll twice for each of 6 attack rolls and choose the better. Perhaps it's just my perception, but I'd be grateful for some more explanation of your experience with it.