from official EA faq
Questing is the pirmary means for forward progress in The Sims Medieval. Players of The Sims 3 may be reminded of Opportunities, but Quests are much more vital to the survival and expansion of your kingdom. A successful Quest rewards your kingdom with riches, increases your Resource Points for constructing new buildings, XP for your Heroes, and develops the Aspects of your kingdom.
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Each Quest has a variety of Approaches you can choose. These will be determined by what heroes you have available to you as well. A wizard will solve a problem differently than a knight, but you need to have both heroes ready if you want to choose.
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Quests can be solved with varying degrees of success, represented by the quality of chalice rewarded upon their completion. A bronze chalice nets you meager loot, Rp and XP, while silver, gold and platimum chalices increase your score.
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Starting a Quest will consume Quest Points. If you fail the quest, these do not come back. QP is refilled by fulfilling Ambitions and Achievements.
source:http://support.ea.com/app/answers/detail/a_id/4974/~/the-sims-medieval-faq