I know, i know. It's been done before, and I'm not just gonna come out and say COPY GUILDWARS@!!11!
But it isn't a bad idea, and it would work for diablo 3.
Generally speaking its simple, when you are given the option to create a game, you can either select "PvP" or "PvM" (or "Roleplaying", depends on how they would like to label it). So if a player feels like killing people, they create a pvp game. If they don't, they create a pvm game.
Also, when looking at games in the lobby (if there is one), you can see both PvP and PvM games. If you want to duel, you join a game that has been created for pvp. If not, join one that has been created for pvm.
In pvm games, you can't hostile other people.
In pvp games, you can hostile other people. Here's where it gets alittle difficult, however. You could either be able to quest like in a pvm game in pvp games for adrenaline rush or whatever, i don't know. Or, you could create a pvp "arena", where you can't quest and it is solely made of rpvping. The second option makes a tad more sense, but you can elaborate/colaberate as you wish.
