From what I have seen here there will be no such thing, I mean long term fatigue because they said it is quite easy to get on your feet after battles in short time, repair everything etc. But units have stamina bar and it is possible that cities after defeat will lose level.
As to friendly fire, for now it seems there is none.
--- Added February 22, 2009
Q. How are projectiles handled in Dawn of Fantasy?
A. Projectiles in the game are all simulated. An archer's range will be quite large, although the farther away you are the less accurate your archers become. The same physics apply to any increase in height, but unlike some games, Dawn of Fantasy is much more realistic in this aspect. If you have an archer on a mountain a hundred miles high, you won't be able to shoot across the map accurately. Projectiles do not follow their targeted unit seen in many other games.
We are still deciding about friendly fire with projectiles. right now, arrows ignore allies all together.
Right now also if the target is to far away for a semi direct shot or on the other side of the wall, archers will volley their arrows up in the air at a decent degree for a long range rain of inaccurate arrows.
Note:We are still debating if every arrow will cost a very small amount of wood to restrict overuse.
There be no dragons in game for player at least for now, but horses are there, units can mount them and dismount.