Brawling

Dueling is a form of consensual PvP combat. In a duel each character consents to engage in head to head combat. Duels can be one on one, or may take place in dueling games, which are FFA (free for all) battles with multiple characters engaged at once.

Dueling is not the same thing as Player Killing, since PKing is about sneak attacks and non-consensual PvP.

It's not yet known if Diablo III will support dueling. It is known that Diablo III will not allow PKing, and that PvP will be entirely consensual, but just how much support the game will offer for arena battles, dueling ladders, and so forth, remains to be seen.

Dueling Rules

Regular PvP players generally adhere to a list of (informal, largely unwritten) rules. These are generally lists of banned practices, or buggy items that must not be used since they convey an unfair or unbeatable advantage. What was on and off this ever-changing list was not known to outsiders. It's therefore a good idea to read some dueling forums or talk to other players before a fight, to be sure of the ground rules.

Generally speaking, drinking potions or using shrines was not allowed, and there were eventually limits placed on the amount of absorption and damage reduction gear that could be used at one time.

Most serious duelers in D2 kept several sets of spare equipment in their stash, and could change into different outfits depending on the class and build of the character they were dueling.

Dueling in Diablo II

Dueling was not specifically supported in Diablo II. There were no arena game types or special dueling ladders, so players who dueled did it strictly for fun, or word of mouth prestige.

In Diablo II, duels were customarily fought in areas that were cleared of monsters. Which character builds were most effective varied a great deal between patches, and there was seldom any "best" character, since there was too much variety in strengths and weaknesses. Rock-paper-scissors was the way of it, though some rocks were necessarily heavier than others.

A recent guest article on Diii.net discussed how dueling has evolved over time Diablo II, and it's a useful read if you want a more historical perspective.