I use character level + 4 to determine Reputation, treating it like an attribute to determine modifiers. Good-aligned Clerics, Paladins, and Druids get a +2 status modifier to reputation. Membership in well-regarded institutions would elicit a similar modifier.
A successful or failed adventure/mission, as well as character conduct, would add a local modifier to reputation (+1 to +2 or more). A local modifier applies to area that is affected (village, city, kingdom, etc.) Outside that area the local modifier does not apply.
The DC to recognize/identify others is 25 - character Reputation (include local modifier if character is within confines of that area).
Failure 6+ character is unrecognized (character is treated based on appearance, behavior, and npc personal attitude)
Failure 1-5 character seems familiar, not sure (may re-roll and is treated as previously listed)
Success 0+5 character is recognized, but general info is known (Reputation affects npc interactions)
Success 5-10 character is recognized and tales/reports of character success/failure known (ie character's local modifiers and Reputaton +2 affects npc interactions)
Success 10+ character is recognized and tales/reports of character success/failure is known in detail (based on local mods again and Reputation + local modifiers affects npc interactions)
*edited for clarity