I don't think penetration would be too hard to do, though I admit, I'm not a programmer of any kind.
But here's what I'm thinking:
All bullets penetrate through at least 1 person and continue to travel to possibly hit a second person. All bullets would do full normal damage to the 2nd person except pistol bullets, which would do half of normal damage.
Bullets penetrate A LOT, especially FMJ (which is pretty much every bullet in RO). Check this out to see what I mean:
http://www.theboxotruth.com/
Of course, the bullet would likely waver off course and slow down so ballistically that would be a pain to model, but I doubt it would be much of a factor so it could be ignored. I mean, seriously, what's the chance of you shooting some guy at 50 yards and the bullet continuing on to kill a guy at 400 yards? Not going to happen. It'll be more like two guys at 10 yards right next to each other. So my point is, just pretend the bullet continues to travel straight-line at full speed. That isn't hard to model, right?
What WOULD be hard, in my opinion, would be penetration with regards to obstactles like trees, sandbags, walls, stuff like that. Basically assume pistol bullets can penetrate 12 inches and retain half of normal damage, and rifle bullets can penetrate 20 inches and retain half of normal damage.
Something like that. If RO could implement this, at the very least person-to-person penetration, that would be awesome.