With the potential advent of players becoming unaligned and maybe even alkanese, I suggest the introduction of a new S/L port item.

Similar to the radar expander, the Subversive Transponder would allow for players to permanently rig a ship to appear on radar as that of another faction. Such appearance would need to be dependent on a number of factors for balance. Possibly range, ship color, and even what ship they are being monitored by. Levels are another potential factor for determining successful deception. Also dependent could be the type of transponder, large or small. It should not affect ones' docking privileges.

I am throwing this out as a plain suggestion to be modified by the community at large.

Have at it...

I like it.
Another idea...what about a "transponder missile"? It would be just like any other missile except no damage, it would just show up identical to the ship your in on radar. It could be based off of the swarm missiles.

Such appearance would need to be dependent on a number of factors for balance. Possibly range, ship color, and even what ship they are being monitored by.

What? Ship color? Huh?

I'm not sure... but I think that the transponder thingy is more of a software thing then a hardware thing, and keeping it an item that takes up a port will make it less used. Which might be a good thing.

Here's an idea: what about a transponder foiler? As in, your ship fails to show up on the radar at all. (With range, type of ship, size of ship, and, if you say so, ship color, being factors.)