All this data is potentially out of date, and should be taken with a truckload of salt
The term "PvP" stands for "Player vs. Player". PvP activities are a major feature of Eve Online. The term can be used to describe anything from ship to ship combat to market competition against your peers. In most cases, however, the term is used to refer to ship to ship combat between players, either individually, or in groups.
For some players, PvP combat is the primary reason to play Eve Online. For others, it's simply one of many aspects of the game. Some players prefer to avoid, if possible, any involvement in PvP combat, preferring to focus on the "Player vs. Environment" (PvE) aspects of Eve Online. These players are sometimes referred to as "carebears".
- Ship loss. Although ships can be given insurance to help recoup base ship price expenses, modules are not covered, and often times the modules fit to a ship can cost far more than the ship itself. Unlike other MMOs where you might respawn with a slap on the wrists, in Eve a ship loss is final, and the money sunk into the ship will need to be acquired again. ($14 buys PLEX, which sells for 500m isk currently)
- Pod loss. Although this does not always happen, in the event of losing a pod in PvP the pilot not only is forced to purchase a new clone but also loses all of the implants he may have plugged in at the time. Implant loss can reach into the billions of ISK.
- Relocation. Upon death, a pod pilot is returned to wherever his medical clone is stored. Often times this can be any number of jumps away depending on the pilots location at time of death. This varies greatly again from traditional MMOs where players are often returned to the nearest possible respawn location.
- Records and Reputation. Every ship loss is recorded in game, but can also be recorded publicly on many kill board networks along with individual players and corporation / alliance kill boards. Many corporations also enforce rules stating that kill mails, rather wins or losses, must always be posted to the corporation killboard. Consistent loss of ships can often lead to a poor reputation for a pilot, and can also hinder his entry into other corporations should they use combat history as a criteria for entry.
- Loot. First and foremost, the winner tends to walk away with what ever cargo has survived the explosion, thus avoiding the loss of a ship and often walking away with enough in loot to purchase a second ship.
- Sec Status. Depending on rather or not the winner initiated combat (fired first), looted, and podded the loser, the pilot could suffer a loss of Security Status eventually prohibiting entry into Empire Space.
- Records and Reputation. In the reverse of our loser, the winner now has a positive killmail to add to his collection. Most PvP Corps use killboards to monitor the performance of their pilots, and a good record often increases their credibility and standings within the corp.
PvP and Pirates
For pirates, PvP is used to control the situation and offer the best circumstances for the extraction of financial remuneration - namely ransoms either in isk, cargo contents or some other 'punishment'. Pirates will attempt to get the target ship down to near destruction (75% hull damage) before entering into negotiations for the pilot's freedom.
If payment isn't possible, The Bastards (a player corporation) usually get the unlucky pilot to either compose a Haiku or sing-along-a-song either in Eve Voice or some other communication system. Such songs are normally recorded for posterity. If the song is deemed of sufficient quality, the pilot is let go and allowed to leave.
So PvP does not necessarily end in a ship being destroyed in these circumstances. No killmails are generated though security status for the pirates will go down (if at possible) and the pirates will be Globally Criminally Flagged, if they are in low-sec space.
The Heart-Rate Factor
Due to the monetary, and long lasting effects of PvP combat, it is not uncommon for each participate to feel a jump in heart-rate during close encounters. Many pod pilots refer to this as their combat rush, adrenaline rush, or 'PvP High' along with many other phrases for the excitement of PvP in Eve.
However, PvP is not the most commonplace event in Eve, even when you are looking for a fight. Because of this, Eve is often compared to real world war and combat situations where you may often spend "hours of boredom for 60 seconds of gun blazing, heart wrenching, adrenaline pumped excitement."