One person on the forum i read stated that he believed " Honor has no place in dark souls and was not intended to be in the game". Now this statement however understandable is incorrect. The item RSSD's description clearly states that some phantoms stayed down an honorable path when invading. People using this item should be treated with respect as they are summoned into your world as duelists not invaders.
Now, where and when should honor be used in PVP in this game? I will start with the when. It is simple. When both players bow. Proof of this comes from real world fighting of all sorts, these sports whether it be boxing/ufc/fencing all have some sort of "bow" so to speak where both players engage each other honestly. When boxers fist pump each other they are wishing the other good luck in the fight and agreeing to the rules that the league has set on the match. After this point you do not expect for boxer A to take out a baseball bat and whack the other in the head. This same principle can be applied to dark souls PVP. If both players bow then you should be expected to fight with honor. If one does not bow? Then the gloves come off and it is a brawl.
Now for where honor should be followed. The dark souls map is huge, and as such duelers and invaders have places where they can do both seperately. Invasions should take place in any place that has terrain that can be used to their advantage, this is a huge facter in invading. Dueling spots include the burg and the kiln. These places are in the shape of an arena and as such should be treated as one. Within these "arenas" allow people to duel and follow a set of rules placed on the matches. The maps big enough to allow duelers a place where they can duel in peace.
Finally for the most important thing of all to consider. NOT ALL PLAYERS WILL FOLLOW THE RULES. It is simple, people wish to win their matches. You must learn how to counter people using "cheap" tactics instead of being a baby about it. If somebody rushes your back at the start of the match then backstep, kick him and unleash a backstab of your own. If you cannot adopt to the way players play a game, you should not be playing the game.