Attitude influences how an NPC perceives you and affects the cost of trading with them.
Attitude = (Charisma + Reputation) x 5
An attitude score of 100, together with a Bartering skill of 5 is required to trade with merchants at cost.
Attitude is gained with an NPC when you complete certain quests for them. Giving them gold and/or items also rewards attitude. Every 20 value gives all party members +1 Attitude (200 value for Teller of Secrets).
Attitude is lost if you choose certain dialogue options with an NPC. Attitude is also lost when you are caught stealing or pickpocketing.