Trained By: Bard, Barkeep
First, this applies to everyone: If you're flagged criminal and a guard sees you, he will attack you. Guards don't "forgive and forget" quite as easily as they did on OSI shards. If Joe the Guard thinks you need killing, then in two minutes when your criminal flag wears off he will still think you need killing. So, don't go into town with a criminal flag on if you want to be welcome in that town...
For thieves: You might want to travel away from your hometown to do your stealing. Stealing will work on various townspeople and town guards (the richest, but most difficult to rob successfully). It will not work on players, monsters, merchants or wandering healers (they've taken a vow of poverty anyway). If you succeed, you get some coinage. If you fail, the guards will attack you. And any guards that attacks you will attack you every time they see you from then on. The idea is that a thief will leave his hometown unmolested (just a suggestion... you don't have to) and use hiding and stealth to get around in the other towns...
When you steal from an NPC, whatever you steal will go into your grab bag (if it has been set with '.grab bag')