Roleplaying in Camelot

An Exercise in White Box Milieu Design
Knights! Roleplaying in King Arthur's world is all about knightly characters who posture a lot and have adventures, both at court and in the wilderness beyond the castle walls. Inspiration for such a campaign can be found in various sources dealing with King Arthur, sources that vary in tone from the serious Morte d'Arthur (Mallory) and Idylls of the King (Tennyson) to the more humorous Once and Future King (White) and Monty Python's Holy Grail. The non-knightly characters would mostly be NPCs I think. All PCs would be created as human Fighting Men, i.e. knights I would consider another PC class, but only after discussion with the player. PCs could vary somewhat by hailing from different kingdoms.
Alignment makes sense in such a milieu in that all knights in good standing in King Arthur's court will be aligned with the forces of Law. Might-for-Right! Bad behavior would lead to a loss of Prestige and eventually perhaps being declared "outlaw". Chaos forces would be those opposed to Arthur and his rule of Law. Certain forces, such as villains and knaves might be out only for themselves and therefore be Neutral in alignment.
Central to shaping any milieu is letting the players know how to earn experience so as to be able to level up the PC and therefore climb the ladder to success. Leveling up in King Arthur's court will be based on accumulating Prestige rather than Experience. Prestige is awarded for "knightly" accomplishments, jousting, winning a lady's favor, doing service to the king, etc. A list of  the knightly and virtuous behaviors the referee wishes to encourage in the PC will need to be made available and can be drawn from the sources (chivalry, Christian chastity, courtly love, pagan impetuousness, etc.).
Religion will play a significant part in terms of how pious a PC is role-played. Christianity, the old "pagan" religion of the isles, and perhaps other obscure religions will be practiced. I think some tension between Christianity and the old religion would be a nice factional conflict for the milieu. In addition to Prestige, Piety points will be awarded for services to one's religious institution such as resisting temptation, winning fame in the name of one's faith, etc., and accumulated Piety points can be used to gain blessings - special supernatural abilities.
Having dangled the stick in terms of Prestige and Piety, it is reasonable to assume that at least some players will go along with the system and play good knights. So where does a good knight earn such rewards? I prefer an open, sandbox style environment including a civilized place, Camelot, where court is held, taverns abound, knaves and villains plot, wily Merlin spins his webs, the priests of the new Christian God compete with the old religion for souls and power, and foreign kings conspire and plot. Add a couple underground cults and Camelot is a hotbed of danger and opportunity. Riding one's charger over the city drawbridge the knight will enter the wilderness, a land of hostile knight errants, damsels in distress, robber barons and outlaws, enchanted forests, lakes and ruins and other places of mystery and treasure. Add in the occasional encounter with the fantastic in the form of a fey creature or giant (or other more "monstrous" being) and I think this World of King Arthur could provide fun for a long time.