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Well when most people talk about rewarding RP in a mud, they mean directly rewarding people for the act of roleplaying itself, much like many tabletop roleplaying games do.
On the other hand, things such as combat, crafting and the like are generally recognised as being game elements with their own rewards. This is because the quality of your roleplaying has no bearing on any rewards you might receive - and indeed, the player who spends time acting the part of a baker is likely to be rewarded less than the player who just sits there churning out pies, because they'll be taking time away from the reward-aspect of the system.
I believe that is also the point one of the previous posters was trying to get at when he said that such a system discouraged roleplaying; it rewards those who place the game mechanics before roleplaying.
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