Allright. I think I finally have a logical system worked out. Posting here for scrutiny or additional feedback. Note that this is pasted, and may or may not have the "charts" intact as desired. You may need to use imagination :) I'll post my Power 19 ASAP.

Sway

All decisions, actions and reactions that we make as individuals have a virtually unlimited array of outcomes. Morals, ethics and ideals drive our choices, leading us down a path that could wind any of a million different ways. The two opposing forces of Void, known as Fabric and Bane, are linked so completely with Reality that the world of the subconcious and the world in which mortals live and work and breathe are interconnected.
Because of this link, emotions and fears can have a very real effect on the living world. A single nightmare could spawn a powerful Chimera, strong enough to conquer an empire. A child may dream for something so much that it literalyl becomes a reality. Reality is not what it used to be.
In Realm, the struggle of Good and Evil is known as Sway. Like a thermometer, it is a sliding scale. At one end, you have the positive power of the Fabric. It is created through positive emotions, enlightenment and deeds of good intent. The opposite end of the spectrum is the power of Bane, created through hatred and other black emotions as well as through evil deeds and the enslavement of mind, body or soul. Every choice an individual makes is one that could very well plunge them into darkness.

How Sway Works

The players are taking the roll of extraordinary individuals who have had power thrust upon them, and the titanic influence of absolute evil or complete and total freedom that seduces them every day of their lives. They are attempting to shape reality around them, and build the world into one in which they wish to live. Every such person is subject to plots, trickery and betrayal…and their worst enemy is always themselves.
Whenever a character makes a decision, or performs an action that could have potential consequences (good or bad,) then there is a chance their Sway will shift. Their tendency towards good or evil will eventually increase the presence of Fabric or Bane in their body, producing strange mutations and powers.
Actions that give positive Sway, filling the character with the energy of Fabric, are as follows:

Fabric Action Sway Shift
Resist Temptation 1 Good
Display Humility 1 Good
Great Compassion 1 Good
Extreme Courage 1 Good
Sacrifice for another 2 Good
Destroy Chimera 2 Good

Fabric represents all positive energy and thought. It is reliant on the Integrity attribute, for ones mind must be strong to withstand the temptations presented by evil.

Actions that increase negative Sway (and taint the character with the horrid power of Bane) are as follows:

Bane Action Sway Shift
Give in to Desires 1 Evil
Arrogance/Pride 1 Evil
Inhumanity 1 Evil
Extreme Cowardice 1 Evil
Total Selfishness 2 Evil
Destroy Incarna 2 Evil

Bane is linked to the Will attribute, for integrity means nothing to the wicked. Control over the self and others is the absolute goal, for power is everything. Thus, their willpower is of utmost importance.

Reading and Using Sway

Sway consists of Ranks and Pips. Pips are individual “points” of Sway, gained for the actions performed during play. Every four pips are equal to one Rank, and there are six (6) ranks total.
The following diagram is approximately what appears on each character sheet, and all data involving Sway is tracked upon it.

Good /  Evil


All characters start neutral, but once they make their first Sway test and gain a pip, this will change. If that action is positive, they circle Good. If it is negative, they circle Evil. This determines their current Sway tendency, and to what end they will be gaining pips.
Each pip is filled in on the four small boxes as they gain Sway. When they obtain +4 pips, the player writes their Sway Rank in the large box.
Note that if a character acts opposite of what their Sway desires (eg: A character devoted to Evil decides to give puppies to poor children), they lose pips and Ranks. A character with +3 pips at Rank 3 Evil would lose pips instead of gaining them if they commited acts of good. If those +3 pips were removed, the evil character would become Rank 2 (instead of rank 3.)
For every Rank that is gained, the player must select a Mutation (for Dreamers) or a Paragon (for Heroic Mortals) that corresponds to their Good or Evil tendencies. Ranks 1 to 3 select Minor powers, and 4 to 6 result in Major powers. If a player slips in Rank, that power is also removed until they can again regain that sway Rank.

Conflicts of Morality

There will be times during play when there are considerably difficult events to judge in terms of Good or Evil. What if the players help an old grandma across the road, meaning good, but she is a psychopath with a chainsaw who butchers 20 children that afternoon? Perhaps a villain is within the characters grasp, but he is unarmed and helpless? Killing him would be dishonorable and cruel, yet would save countless possible lives.
When such circumstances occur, there are only two factors to consider. Intent, and the decision of the GM. If there is doubt over the actual Sway a given action would create, the intent of the character performing the act is the determining factor. Even if a hundred die because of a single choice, so long as the intent was to save them, Sway is positive. The reverse would apply for evil acts.
If intent does not clear the issue up, the final say rests in the hands of the GM. This is final resort, for only the most ambiguously strange actions will be unclear in intent.

Sway Tests

Whenever a character tests to shift their Sway, they add their current Rank to their Will or Integrity attributes (Good uses Integrity and Evil uses Will.) Rolling 2d6, they then add this value to the total. The resulting number is compared to a difficulty number (see chart below). If the roll is a success, they gain pips. Failure produces no pips.

Rank Difficulty
0 14
1 16
2 18
3 20
4 22
5 24
6 28

If a character is performing an action that contradicts their Sway and will lose pips as a result, they may make a standard sway test. However, their current number of pips is added to the difficulty of the roll. A failed roll will result in the full number of pips being subtracted. A success lowers the penalty by 1 (thus, -2 pips becomes -1).

Note that multiple Sway bonuses can be applied at once. If a character is performing an action for which one or more of the listed Sway actions apply, they can add that to the total amount gained. For instance, an act that requires compassion and immense courage and results in the destruction of a Chimera would result in +4 Sway.
Likewise, if they perform an action with both Good and Evil elements, the bonuses can affect one another. Saving an innocent life, for selfish reasons would result in +0 (since +1 Good and +1 Evil cancel each other out.)

SIDE NOTES:
- Characters always lose/gain FULL sway amount, regardless of Rank change. Having 4 pips, and losing 5 would drop you one rank, with 3 pips remaining in said rank.
- If the net sway shift would be 0, a roll does not need to be made.

Example:
Jack busts in the door, jumping through the opening into a hail of arrows. Thankfully, none hit him and he enters the chamber unharmed. Around him are 3 bandits with crossbows, and 1 with a knife to a womans throat.
“Drop the sword or I’ll kill her!” he swears to Jack, and presses the knife close enough to her throat to draw a bead of blood.
Jack has a choice to make. Put down the weapon, and he likely dies along with the woman. Fight, and the woman more than likely dies, although he will undoubtedly survive. Jack makes a decision: While the woman might get hurt, his survival is necessary. Without him, the Queen will die! National security will be at risk…the fate of a Nation outweighs that of a single woman. He begins the assault on the bandits. The old woman is killed instantly, but Jack manages to defeat all 3 Bandits.
As a result of his action, a woman died. However, as a loyal guard of the Queen, he did his duty and protected her (even if the cost was innocent life). His values and morals were not crossed, and thus he gains positive Sway for the action.
What he did took courage (+1 pip), and sacrificed the good of one for the good of thousands more (+2 pips). This is a total net shift of +3 pips. However, because someone was harmed intentionally by the act ( a Bane action) there is a loss of -1. The total Sway change is +2.)

Hi!
  Looks good, I like it. I assume Will is used to create Dream Magic?

Correct, Will is the driving force for Dream magick.

So, for a roll to use a Dream power:

Dream Strata(2 highest if mixing more than 2 Strata) + Willpower + relevant bonuses + d6=total  (versus a difficulty)

Mortals, however, I am still slightly on the fence regarding. Since "Paragons" are attained as a "mutation" when the individuals Sway reaches a certain level (ie: 1 paragon per Rank), they dont necessarily have a rank. Rather, they provide permanent bonuses on certain actions. I am seriously aiming towards Mortals remaining highly Skills-driven, while Dreamers focus more on Attributes (in terms of using their power on self or others).
    If this was the case, I could see a Heroic Mortal using a power in the following fashion:

Relevant Skill + Attribute + Paragon Bonus + other modifiers + 2d6  (versus opposed roll or difficulty)

This seems the most logical method, and provides a distinction between the two character types.

And, of course, Will makes it easier to garner Evil Sway as well as making it easier to wield Dream...is this effect intentional?

Heya,

I'll post my Power 19 ASAP.

Note that if a character acts opposite of what their Sway desires (eg: A character devoted to Evil decides to give puppies to poor children), they lose pips and Ranks. A character with +3 pips at Rank 3 Evil would lose pips instead of gaining them if they commited acts of good. If those +3 pips were removed, the evil character would become Rank 2 (instead of rank 3.)
For every Rank that is gained, the player must select a Mutation (for Dreamers) or a Paragon (for Heroic Mortals) that corresponds to their Good or Evil tendencies. Ranks 1 to 3 select Minor powers, and 4 to 6 result in Major powers. If a player slips in Rank, that power is also removed until they can again regain that sway Rank.

When such circumstances occur, there are only two factors to consider. Intent, and the decision of the GM. If there is doubt over the actual Sway a given action would create, the intent of the character performing the act is the determining factor. Even if a hundred die because of a single choice, so long as the intent was to save them, Sway is positive. The reverse would apply for evil acts.
If intent does not clear the issue up, the final say rests in the hands of the GM. This is final resort, for only the most ambiguously strange actions will be unclear in intent.

- Characters always lose/gain FULL sway amount, regardless of Rank change. Having 4 pips, and losing 5 would drop you one rank, with 3 pips remaining in said rank.
- If the net sway shift would be 0, a roll does not need to be made.

Hi!
  What might help players and GM with determining good vs. evil is an overriding theme/motto.
  For instance, in Star Wars it is selfishness vs. selflessness. So, the question of light side vs. dark side is a question of who benefits from the action. For instance, killing is not inherently evil in the scheme of star wars, unless the character benefits from it in some way.
  What is your theme/motto? What is the one unmistakable question that can't be misinterpreted in your game settings rules of ethics?

"What is your theme/motto? What is the one unmistakable question that can't be misinterpreted in your game settings rules of ethics?"  -didnever

Thats a good question. I suppose in the theme of the game , drawing on dreams, the central Good/Evil aspect would simply be that our own dreams and aspirations can be good...but they can also lead to the most horrifying of consequences. So, I guess, Dreams are Dangerous.

"So if someone’s Sway goes negative, they actually end up shifting into the opposite kind of Sway they had before?  Is this right?" -Troy

yes, thats basicalyl right. If you had Sway +1, and 4 pips, and then killed your family...you drop in sway. Say you dropped 6 points. So, you drop to Sway 0 (4 pips per rank) and are down to 2 pips in that. If you drop another 2, you end up at Sway -1.

"And, of course, Will makes it easier to garner Evil Sway as well as making it easier to wield Dream...is this effect intentional?" -Ramidel

Yes and no on the intent. High will makes it easier to use dream power, yes. Therefore its an important attribute for them. However, the more they use their power the more likely it is that they fall into darkness and are subsequently in peril for doing so.

Also bear in mind that the further they hop in either direction, the more difficult it gets to advance further. Thus, those reallllly wanting to play an evil char will need to commit horrid atrocities to reach such a level. Likewise, the Uber Goodies have the same predicament.

-Ramidel

I notice what you meant now....I had Integrity unique for Good acts and Will for evil. I think I will change that so both use the same mechanic. Plus, that will help to avoid some confusion. Perhaps integrity can be utilized in a different way for each (in the actual end-result of the sway check perhaps)