I recently completed the K.O.T.N. questline, but now, most people I meet greet me with, (paraphrase), "I used to think you were a Hero, a Holy warrior...but now I see you are just like the rest of us."
I admit, I had started the Thieves Guild Q-line 1st, but, I only did the "entry' quest.
Yeah. I have many Characters. Some REALLY BAD..heh heh. But, I was just surpised by this particular reaction, since it comes from NPC's I am only just meeting, for the 1st time!
It destroys immersion for me, especially when I walk into a room and hear the conversation about how 'somebody' has *found/received* the Boots of the Crusader, then, when I speak to that NPC, they come out with this accusation. Just saying...
I guess having *faction recognition* built in to the game was necessary, but, too hard to make it work in "shades of grey", like in real life.
It's possible to retain the NPC's belief of you being a holy knight even if you complete the Dark Brotherhood and Theives Guild quests. You'll never get that line "I used to think you were a hero..." This is how:
Begin the quest for the relics, and acquire however many of the relics you like without getting them all. Next, do all the evil things you like, as long as you never accrue bounty for murder. (You can murder people, as long as you don't get a bounty, even if you are removed from a guild.) Be sure to pay S'kirvva or Armand to remove your bounty! Do not serve time in jail!
Then, when you're done doing evil things, (finished DB and TG for example), walk the Pilgrim's Way again. Your infamy will return to 0, and if you have the Gray Cowl of Nocturnal, you can equip that to commit any further crimes without the increase of infamy.