:) Created as an option for players, chaos/order would offer additional spells (blades, shields, etc) to place in the deck. To get spells within your faction would be free and based on level, though you could use training points to obtain skills from the other faction.
For PvP, opposing factions would be given a natural resistance to the other's damage (from all spells). Also, the matching system would take this into account. When opposing factions fight, the winner gets something (call it faction points) that can be used, like tickets, to buy faction gear and items. I don't like the idea of overall faction rankings effecting the game because that's too easy to exploit - it should be an individual thing, i guess.
For PvE, a new land where monsters are aligned to different factions. If i am order, order creatures will not attack me. If i'm chaos, chaos creatures will not attack me. A different (opposing) storyline for each side - both saying that the other is "evil" and the character must help to stop the "evilness". Figure out something nice for end-game in this world ( i have an idea, but i'm not gonna tell).
If a player decides not to choose a faction, cool. In PvP it is as if they are simply fighting another player (who has a couple more buffs - nothing you couldn't get with a treasure card anyway). In PvE, the non-faction player would be able to follow/play BOTH story-lines (like each side is trying to recruit them or something). There's your advantage for NOT going factions.
8) Possible disadvantages for going factions: cost 200 gold per week or must pay 15,000 gold to join or (this is my favorite) must use a faction deck: max 40 spells, 4 of each, sideboard 10, faction 10. maybe must wear faction suit or... you know, the deck is just a good idea.