Answering this mainly for my own satisfaction. And coz, hey, bandwagon!
If you decide this stuff early, you are less likely to have misunderstandings and more likely to all be on the same page.
Truer words never spoken.
1. Ability scores?
3d6 in order.
2. How are death and dying handled?
0 hp = down. GM has a "Dead, Dying or Malingering?" table which is rolled on at the end of combat.
3. Raising the dead?
Can be done. Has complications. You tend to bring things back with you...
4. Replacement PCs?
Promote your senior henchman to PC status. Else 0xp, 3d6 in order
5. Initiative: individual, group, other?
6. Crits and fumbles: how do they work?
Nat 20 = attack again.
Nat 1 = foe ripostes (gets to attack you again)
7. Benefits for wearing a helmet?
No, but not wearing one makes your head AC9, and I understand you keep important stuff in there...
8. Can I hurt my friends if I fire into melee or do something similarly silly?
Yes, oh god yes. Please, fire into melee, make the GM's day...
9. Run from some encounters, or kill everything in our path?
Invest in running shoes. There's always someone bigger and nastier out there.
10. Level-drainers: yes or no?
Yes, Con drain.
11. Can one failed save result in PC death?
Yes, because actions have consequences.
12. Encumbrance tracking: how strict?
I use the nice and simple LotFP Enc. rules (25 items max, bulky items count for more), so things are pretty self-regulating.
13. What's required when my PC gains a level? Training? Do I get new spells automatically? Can it happen in the middle of an adventure, or do I have to wait for down time?
PCs gain levels only when they return to town and integrate their hard-won experience as life lessons and new techniques.
New spells/lvl = Int mod. You can sub in potion formulae instead...
14. What do I get XP for?
You get XP for killing, theft, drinking heavily, and seeing/doing new stuff. The last is in accordance with Jeff Rients' XPloration rules.
15. How are traps located? Description, dice rolling, or some combination?
Description. If you don't say you're looking, then you probably walk right into it.
16. Are retainers encouraged and how does morale work?
Retainers are heavily encouraged, unless you fancy starting at 0xp when your PC goes "Blargh! I'm ded". Morale is pretty much by the book.
17. How do I identify magic items?
Magic items tend to look magic IMG: the more powerful an item is, the more awesome it will look.
You have to attune the item (takes 1 turn) and then attempt to use it. Command words must be researched (interrogating sprits, sages, monsters, etc.)
18. Can I buy magic items? Oh, come on: how about just potions?
Potions, scrolls and minor charms (+1 to something), yes.
Major stuff, not a chance! You have to take major magic off someone/-thing who already has it.
19. Can I create magic items? When and how?
Scrolls at L1, potions when you learn the formulae. Magic items at L9.
20. Splitting the party?
You can if you want. But expect to spend half your time listening to other people having cool adventures...
Thanks to Brendan for setting these out.