"These are different games and the DFUW character system is incompatible with the old characters. These are two completely different worlds, there is a different skill acquisition system, different skills, different stats, all the way down to the story-line; everything makes them incompatible," explains producer Tasos Flambouras.
Interestingly, he mentions that the old characters will be preserved in some fashion, possibly for "Darkfall-related side-projects we are considering."
Finally, the Unholy Wars client will be free of charge to everyone who has ever purchased the original game. Read more at the official Darkfall blog.