Mass Effect 3's reputation system explained
A post on the Bioware blog describes how Mass Effect 3's reputation system has moved on from Mass Effect and Mass Effect 2's Renegade vs. Paragon setup. We'll still be able to unlock extra conversation options and satisfying interrupts, of course, but the adjusted reputation system should let us do this without feeling the need to commit exclusively to a Paragon or Renegade path.
"In Mass Effect 2, if you wanted to get the hardest Charm options, you had to play an almost completely Paragon character," Patrik Weekes explains. "We intended many of those Charms to be fun Easter eggs, but many players felt like they had to play pure Paragon to avoid being penalized by the loss of a dialog option. In Mass Effect 3, your Reputation score determines both Charm and Intimidate options, and that score is determined by adding your Paragon and Renegade scores together."
That should let us choose to act as a Paragon one moment, and go Renegade the next, making decisions based on the situation rather than a need to grind for maximum morality points. Many important acts in Mass Effect 3 will increase Shepard's overall reputation score without changing the Paragon/Renegade balance. In these cases "the bar on your screen will grow, but the Paragon/Renegade ratio will remain unchanged."
Mass Effect 3 will have one overall reputation measurement instead of two separate bars. New conversation options will unlock as your actions push the bar past four progression points on the bar. "If you see that you’re a bit short of hitting a new line, and someone has just said something like, “Let’s head down to [that person's homeworld] and finish this once and for all,” it may be worth your time to go do a couple of side-quests first," says Meekes. You can see the new reputation bar on the left in this here screenshot.