Basically, if you die to a challenger, your skills/ship rides are reduced according to your bloodlust. Thats stated in HELP CHALLENGE.

I just can't really see the point of issuing a challenge in the middle of a fight. As far as I can see, there is no good reason, other than trying to increase your opponents loss when you kill them.

The other point really tho is the timing of the challenge. I've seen it done when the target is immobilised, and down to bad health levels. Where is the point in that?

rgds.

Written by my hand on the 12th of Eleuthral, in the year 1045.