Thank you [MENTION=9037]Elf Witch[/MENTION] for bringing this thread up, it's really interesting stuff! I'm only sorry I can't provide much help here, because I never fully managed to handle these kind of problems myself neither as a DM nor as a player
Starting from your case, I think you and [MENTION=28373]Broken Druid[/MENTION] handled everything very well, certainly better than I would have managed. But I have to admit that I would have also as a player had some issue with the prisoner-killing scene.
One thing I want to mention, is that even if you write up a reference "setting's ethics system", individual characters are always going to have their issues with it. I mean, look at our modern world, it's not that
we agree with our own ethics system, in fact we have many and we have more arguments today than every before. But why? Are we sure that the people in the middle ages were so much more united in their beliefs and ethical views? Or could it be that we only see the bigger picture in the written form of
the law, which (in medieval times certainly more than today) was written by those few in power, not by the population? Hence I am not so sure that people of the middle ages accepted that law-based ethics because of cultural convinctions rather than simply because they had little choice (although it's possible that this later translates in actually believing in such ethical system).
In a way, I would find it actually quite interesting for these issues to come up in a game of D&D, because I think that "grey areas" are more interesting, but then not everybody likes dealing with these and react with strong "black & white" behaviour.
The only thing that I could do to mitigate problems a bit, would be to try and improve descriptions in order to either move more into grey areas or farther away, depending on the group's perceived preference. For instance, about slavery... it's very different if you describe:
- women, children and aged people being ball-and-chained and clearly suffering both physically and psychologically for their condition
- unchained servants working and living in relatively poor but non inhumane conditions, but unable to leave because of the law (think young Anakin and mom in Star Wars, or slaves in the Roman era)
- ball-and-chained prisoners of war or outlaws, who otherwise behave like decent people and would simply wish to be freed
- ball-and-chained prisoners of war or outlaws, who actually behave like petty criminals and look like they would gladly murder a lot of people in retribution for their condition
I think I would react very differently to each of these... so in case of a kill-the-evil-prisoners scenario, perhaps it would be better (if you know that some of your players have a hard time figuring out the greys) to enhance the description in order to ease the choice. Maybe those prisoners saying "no, we won't convert to LG" is quite too blunt and short to figure out what to do, in fact I got too a feeling of discomfort that the LG cleric killed them after one question... even if I understand that the above is acceptable for your settings ethics, and maybe the LG cleric could have killed them even without asking.
I don't know... Maybe the bottom line is that really you shouldn't try to have a settings ethics to redefine Good vs Evil, because it's always going to be subjective to characters as well as players, and just restricts to the laws.