I used to play a game called Anarchy-Online, very similar to SL but an extremely extensive version. Pvp works perfectly there where players can fight anywhere in a lobby but can only fight each other when they have *'s next to their name. This is done by targetting a guard (pressing a button in SL would be more sensible). The *'s last 5 minutes and after that time they dissapear, hence PvP ends for that player and cant be attacked until the guard is targetted again or he continues to attack his opponent. It keeps alot of peace in A-O and players learned to respect the system alot more. Maybe this could be implemented into SL somehow?