When playing Swtor you are sometimes presented with an additional reward when answering in the cutscenes. Depending on your unlikely heroism or your uncalled for Jackassieness the game will reward you with either Dark side or Light side points. Now these points may seem kind of useless at first but I can assure you that this will change very quickly. Every time you reach a certain number of Dark or Light side points you level your character up through that specific tree.
What I mean by tree is whichever alignment you are gaining points toward. Picture each one as talent tree, if you mess up you can always just respec or work towards fixing it. Also the light and dark side options are not as important as an actual talent tree but they still have their uses. Uses such as allowing you to wear a new piece of gear you just got that has an alignment requirement and things like that. Below is a picture of the alignment bar that can be found on your character screen.
This picture was taken quite awhile ago when I was still level 2 and had a very minimal amount of Dark or Light side points. The little line in the center is where you are now. The other lines that go through the alignment bar I think are the different levels of Dark/Light sides. I could be wrong though since there was a limited amount of time in the beta I was unable to test and research every last thing that I wanted too. From what I have seen with building up points for either the Dark or Light side, getting points for one does not effect the other.
Currently my character has 1100 Light points and 100 Dark Points. When I finally picked a question option that rewarded me with Dark side points, my Light Side points did not change one bit. I know in Mass Effect and the other KotoR games whatever alignment you chose effected the other. I can't remember how much it did effect the other tree, but I am damn near positive it did. Below there is a much more up to date picture of my Alignments that I took in the final hour of beta. I moused over the bar to show you the exact amount of points I have and give you a bit more information on this whole sha-bang.
As you can see my rank or whatever you would like to call it is (Light I). This means that I can use any gear that requires me to have Light I and also gain any extra benefits, if there are any, for being the first rank into light. The main reason you need to pick a side early on is so you can start building up either Light or Dark points. By level 14 or so you probably should have reached the first rank of your alignment, which for me was Light I. You probably guessed already but there are some graphical differences in things that require Dark side allegiance and Light side allegiance.
I can't think of any off the top of my head for Armor but I can tell you that the only way you are able to get a red lightsaber on Republic is by going far down the Dark side. Sorry that I can't offer more information there but you gotta cut me a break... The game is still brand new! Since I couldn't figure out how to encorporate this valuable information into my useless bantering through the above paragraphs I now have it in note sections below!
Helpful Tip: You can press the Spacebar to skip through the options of chat quickly.
Helpful Tip: If you want to restart any converation you've had in the game just press Escape to exit out and start over!