I'm not sure if the "you killed an innocent" message is actually tied to any penalty. However, it just triggered wrongly for me. I was walking close to someone who appeared to be a brigand. Autocombat occurred between turns. The monstrous warning popped up.
My save game: http://dl.dropbox.com/u/8944277/monster.EleSav
This happened to my when my sovereign was on auto move. I assume my sovereign in their path just moved onto the same space as an enemy.
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