I would not recommend a binary good/evil karma meter. It's been done, and done, and done again poorly. It's possible to do something interesting with it, especially if it's not as simple as good/evil (Altruistic/Self-reliant, Order/Chaos), but when implemented badly it can be really bad.
I would recommend a multi-axis karma meter and having to make hard moral choices between two or more equally valid ideals. Say for example Brains, Heart and Nerve - what? Too silly? Okay, then call them Honesty, Kindness and Courage. While they're not incompatible in theory, there are obvious situations where you have to pick one over the other.
A system of multiple tracked ideals is especially attractive if you want to add social mechanics and multiple endings; simply have an Honesty ending, a Kindness ending and a Courage ending and you're set. If you want, you can include in-between values - Generosity for Kindness and Courage, for example, or Justice for Honesty and Courage.
If the above example seems familiar, there's a reason: it's the basis of Ultima's entire cosmology. Yes, even the joke about a Brain, a Heart, and da Noive.
