For me, it really has to be determined on a case-by-case basis, largely based on the relative rates involved.
If I'm in a CL or smaller and fighting a similar ship, I assume no quarter shall be asked and none given. If I get down to a certain hull level and I want my ship to survive, I withdraw with a "gg," and I assume my opponent is capable of deciding whether to withdraw or continue the fight.
If I am in a smaller ship and am engaged by a CA or DN, well it's my fault if I allow my ship to be destroyed. That's why I have the option to forfeit before the battle if I so choose. I invaribaly accept engagement from much larger opponents but if I am hopelessly outgunned I will withdraw with a "c ya later."
If I am in a CA or DN, I have no problem attacking smaller ships, after all this is war. However, if the ship is hopelessly outgunned I will (if there is time before the initial "pass") tell them that if they choose to withdraw I shall hold my fire. If the opponent engages anyway, I fight. If I get them down to a perilous level I will again offer them the chance to withdraw. If they refuse to answer or withdraw, well their colors are still flying... fair game.
Bottom line, anyone can warp away early in the battle. If they choose to engage a superior ship, they are taking a risk. I don't go out of my way to kill opponents in smaller ships but if they choose to stand and fight then they are responsible for the consequences.
On another note, it is common on many servers to "spar" with opponents. In this type of battle it is understood that neither player will kill the other. This can be done by either using the /tell command to "whipser" between players and arrange a 1 on 1 "no kill" game or by just setting it up on the general channel. This was very common for example on the recent KOTH server (excellent!) and I was a "catch and release" for Suleo's Raptor on numerous occasions, which taught me a lot about fighting Romulans. By doing this you can also type critiques back and forth of each others' performance.
One important thing to remember though: if you "spar" with certain players a lot by prearranged "duel," don't be surprised or outraged if when you run into those same players by chance, they kill you, since it wasn't agreed beforehand that it would be a "no kill" match.
There are times when you simply cannot offer mercy, such as when defending a base or planet hex. But in general I try to offer it as much as possible. It has come back to me many times over, for example I once let king1959 go; a day or two later I encountered him in a MUCH bigger ship and he remembered our last battle. When I was at death's door he called off his human wingman saying "I owe him one, let him go." Most players don't forget stuff like that.
A caveat to new Dyna players for P v P: It's all well and good to attempt to "fight with honor," but unless you are already acquainted with your opponent, you must assume that they are going to kill you if they can: fight as hard as you can. If you have the upper hand, then you will be in a position to offer mercy, but initially, always assume that "no quarter shall be asked, and none given."
The barbarians who sacked early Rome put it best: "Vae victis." Woe to the vanquished.
SirWilliam