As for leveling and factions: I think that there should be a bunch of ranks/ levels within the factions, and you can move up within them. That's just me though the only tricky part about factions is that they need to be equally interesting (not sure if that's the word I'm looking for) to players, while they each need to be unique enough to stand apart as well...

And maybe there could be a test, or 'sorting hat' (ha) that would recommend which faction you join based on your accounts statistics (like player kills, baddie kills, spar w-l, or whatever) I thought it would be cool if when you killed a faction member, you lost point/ whatever in your faction. And the faction hideouts could serve many actual, practical purposes. Like a spar where you can practice with other members, where you go to recieve/ turn-in missions, where you get your gear, shooting ranges, mess halls :O? we're you could get health, and a lot of other stuff. Plus a shop where you can buy faction unique items like bikes :o