Fame can be earned through a variety of deeds and abilities, but more importantly, by making it KNOWN you did those deeds and abilities. Showing off trophies, shiny trophies, accomplishing various deeds, having powerful friends. All these things can increase your fame.
Fame reduces the DC of all knowledge checks made against you. This is a double edged sword; people who know who you are and what you can do will likely be more willing to help you due to fear or admiration. Add your Fame to all charisma based checks with all people who know who you are. As you become more renown, people will be more willing to hire you for most jobs. After all, a military leader with three very visible campaigns is assumed to be more skilled than one of nearly twice his skill level who has no known successes. However, just as it is easier for normal people and potential employers to learn about you, it becomes easier for enemies to know about you.
Tales of your deeds will spread on their own, if they are significant enough, but a little performing never hurt to spread the word.