I purchased the Dungeon and the Reaper expansions and noticed fate on the character cards but there is nothing in the rules about what fate is or does. Can someone help me out here? Also, none of the original characters have fate so how many fate points/tokens to they get?

Sounds like you have the BI 4th edition. In order to use the expansions you just bought with the base game characters, you'll need to buy either the Upgrade Pack (which gives you everything but the board to, well, upgrade the BI version to the FFG version) or the Revised 4th edition base game. You can find the R4th rules online: Catalog -> Board Games -> Talisman -> Support

I have the BI 4edition and use it álong with the dungeon expansion - works great. The dungeon adventure cards are smaller then the one you already have, which doesn't matter, however the problem is that the reaper expansion comes with 90 new adventure cards that are smaller than yours. If you're not bothethed - just mix those decks together and keep playing! fate isn't important and a rather stupid thing to addm if you ask me. And, keep in mind that FFG had to make some changes with their new edition...