Nothing about a challenge being neccessary/proper that I recall from the books (just the veil). They do hold honor in high reguard though, and against respected foes, a challenge might be the favored practice. Trollocs deserve to die though, and challenging them just makes it take longer
Lasting initiative works just fine for me, it's my preferred method. The book says reroll every round though, and the general consensus on various faq-like threads is keep house rules at a minimum.
Unfortunately I love house rules, and will use that statement as prelude to my next:
I very much encourage stunts. If you guys can think of something really cool that wouldn't be beyond the realm of reason for your character, but just isn't represented by rules/feats/whatnot, describe it in detail and post an OOC note at the end of your reply stating that you are attempting a stunt. Generally
at least 1 skill check and 1 attack roll (possibly a called shot) will be made to determine the success/failure of the stunt, with added effects on par with the difficulty of the check(s). To give an example from a past WoT game I've had:
Samus Din'Wieldir, a blademaster who had captured and learned to ride a seanchan raken was flying above a city and needed to get into the 3rd floor of a 5 story building immediately to draw enemy soldiers' attentions away from another PC they had just reduced to negative hp, or Samus' ally would surely perish. Damian (the player) said to me: I want to dive 30 feet with the raken, have it get as close to the buiding as possible, then I will cut the harness on my saddle, jump off the raken, through the closed window, and hopefully get a suprise attack on one of the soldiers...how much of that can I do and what will I need to roll?
In the D20 rules that would be completely impossible to do in one round. Realistically, one could do that in 6 seconds; so I had him make a DC 20 ride check to get the raken to get near the window, followed by a DC 25 jump check to make sure he could reach the window, a ranged attack against the window's ac to make sure he didn't hit the wall, and a DC 20 tumble check to see if he could regain his footing quickly enough to make an attack. If any check failed, the stunt would fail at that point, and the laws of gravity would take over from there.
Stunts don't have to be last-ditch, desperate efforts. For instance, a month or two later in the same campaign, the party was trying to avoid the invading Seanchan armies for a period of several days, and in that time the party's wolfbrother/two rivers archer was separated from his pack mule, which was carrying most of his gear and a large quantity of explosive material. By the time he found his mule, it had been confiscated by a party of 20 seanchan soldiers and a pair of damane/sul'dam couples. His only stunt was a witty comment to the effect of 'been nice knowing you, Ponhei' (yes, he named his mule pony), and fired a burning arrow at the saddlebag containing the explosives from near-maximum range on a two rivers longbow. Long story short, a charisma check and a called shot wiped out 2 dozen seanchan military and a mule named pony.
I really don't have rules for the stunts, they've all been player-inspired and made up on the spot (my favorite line as DM to player is "you can try"). Basically if it would add drama and flaire to the story of the game, and you haven't done the same thing or something similar before, and it isn't just a blatant attempt to get around the rules, chances are I"ll let you try it-just keep in mind the more you want to do with a stunt the tougher it will be. Also, these stunts are supposed to be special, dramatic events at potentially pivotal moments in the game; go ahead and experiment if you wish to get an idea of how I work them, but please don't go overboard trying to use a stunt in every fight once you do.
