S'mon said:
			
		
	
	
		
		
			Well, given that they massacred loads of people, I would tend to think a death sentence might be appropriate... following torture, of course.  if you don't want to end the campaign, run an "escape from jail" scenario.  Anyway, the PCs are now dead or outlaws, or both.  Sorry but I really don't think "saddled with some healthy fines and be watched closely for a long time" is going to cut it here... 
		 
		
	 
The legal system in a lot of fantasy worlds is too lenient.  Depending on the period you choose as a model, a realistic set of punishments might include the death penalty even for theft (e.g., 
http://www.oldbaileyonline.org/history/crime/crimes.html).  I originally passed on buying one of the books on running city adventures because the punishment listed for theft was something like being fined twice the value of the stolen item.  Yeah, that would explain why a fantasy city has a powerful thieves guild and thieves working every market and street.  Good thieves would quickly realize that if they can get caught for fewer than half the thefts they commit, crime really will pay for them under such a system.
Setting designers need to realize that before we developed our modern notion of reforming criminals and warehousing them in prisons, punishment was usually immediate (it costs money to run prisons--swift justice is cheaper and more entertaining) and had three basic motives:
1) Simple retribution.  Lex talionis.  An eye for an eye.  That means that the punishment should be at least as inconveniencing to the criminal as it was to the victim.  That's the 
minimum and they may only go that easy when the crime was unintentional or in civil matters involving damages or loss.  See (2) and (3) below for why the punishment is usually worse than an eye for an eye.
3) Deterrening people from doing the crime in the first place.  The guiding principle here is to make the punishment severe enough that even if the risk of being caught is low, people will be discouraged from doing the crime.  Because the punishment has to compensate for possibility of not getting caught, they are often out of proportion to the crime.  As pointed out above, if a thief is only fined twice the value of what they steal, they know if they can get away with two successful thefts for every theft where they are caught, they'll still come out ahead.  If they know they will lose their hand or be executed on the other hand, even if the odds of getting caught are 1 in 100, they might think twice about doing it.
3) Removing the person from society.  Basically, the world is a better place without bad people so let's help them move on to the next world.  Crimes that mark people as a bad person will often have the death penalty as a punishment.  Because they lacked the money, technology, and facilities to run prisons and were not squeamish about executions, the death penalty became quite popular.  In D&D terms, an Evil alignment in combination with serious crimes would probably make it difficult to escape the death penalty unless there is a strong religious or social imperative to give people the opportunity to repent or reform.