Your Karma score would influence various things, mostly the way that NPCs would react to you, your available options for a few quests, whether bounty hunters or mercenaries will eventually start hunting you down, and most importantly, whether potential party members would join you, and if so, which ones. For doing something bad, like selling your friends to slavers, blackmailing merchants, and setting off a dormant nuclear warhead in the middle of a busy town because a neighboring town leader thinks the place is an eyesore, you get negative Karma. For doing something good, like giving a thirsty beggar some water, asking for no reward for a service rendered, or seeing how many rounds of ammunition one mob boss's head can hold, you get Karma.
Traditionally, Fallout games keep track of a player's actions using Karma.
