I like one thing now that you explained it Koni; however, not as you see it. I think the peaceful/battle mode could be changed like that. So in order to attack (draw your weapon or staff), you must be on battle mode. When you unequip your weapon or staff, you go on peaceful mode. It's a nice idea, but then comes the issue of players abusing it. :o
Mabey you can make a few tweaks in the system to change this around,
such as:
When the player is attacked by someone, (if on battle mode) he will have to stay on battle mode until he dies, or unless he flees for 20 seconds or more, (meaning he musn't get hit again in 20 seconds) that would be an almost sure way of stoping the abuse.
About the grace stuff, how medium and high, it should be changed soon, after all the artifact weapons are completed, and alchemy is finished. Then low would be 50(100 at alter), medium 75(150 at alter), and high 100(200 at alter).
The reason it is so high on the mudlib is because the game that uses this mudlib made it easy to obtain weapons and level up.