I like the idea that people will ask you for things if you're famous for it. It makes sense, it happens IRL and it would make finding things to do easier. Of course if you're bad at things, or you've gained a false black mark people aren't going to ask you to kill cyclopes anytime soon. Failing at a simple chore would make people think you are incompetent, especially if it's the first thing they've ever asked you to do, or if you have no reputation for it.
On the "good at things, therefore, quest" nonsense...
A wandering healer that happens to slay a lot of wolves while traveling is only going to be well known for healing unless he makes a point of telling people about all the wolves. Your wandering healer with relatively low healing skill and legendary wrestler skill would be told to stay indoors when bandits came but might charge outside and reveal his prowess in front of the whole town, earning him a reputation as more of a fighter than a doctor.
I like this concept. I think the problem we're seeing is a clash of vision. One group wants the game to be epic, even if it involves 'fudging' the realistic aspect of it. The other wants the game to be realistic, even if it involves lessening the epic aspect of it. Ideally, and what I think Toady is aiming for, the world would be realistic in that nothing would be scripted and would simply be procedurally generated, but the worlds would be diverse enough that any player with enough skill could forge an epic story from their adventures.
That said, many of the concepts explored here about fame are very good. A village won't know you're a legendary warrior (though they may assume you're a soldier or mercenary if you arrive with bristling muscles, scars, and a full set of battle-scarred weapons and armor), however if you singlehandedly dispatch a goblin ambush and save one of the villagers, you would gain some fame among the townsfolk. If you gained even greater fame, say by driving off a semi-megabeast, you might hear tales of yourself in taverns or be offered jobs. This wouldn't be scripted as an event as much as a behavior. Taal said it, the events outlined in some of Toady's arcs would be the result of NPC's weighing their options as opposed to scripted events.