Consider having the characters designed so that there is some meaningful reason for them to be the ones selected.
I remember one campaign I played (Planescape) in where some red dragon asked us first-level scrubs to go find her precious stolen dragon egg. My response to that was "You must not want it back very much!"
Contrast another campaign (Eberron), where one of the PCs was of the dragonmarked noble house, and the rest of us were retainers or otherwise friendly/bound to him. He gets sent not because he's "high level" (metagame concern) but because he's an important guy, and we get sent because we're his posse. That's a lot better story.
In other words, if these organizations would hire "professional agents" - why are they not generating characters that are professional agents? Or are in that nation's military? Et cetera? The whole "let people generate anything they want and then it's the GM's job to somehow shoehorn them into the party and the campaign" approach is old and busted; don't do it. See this previous question on forming parties for relevant advice.
Of course suitability doesn't have to be "best for the job," it can mean "disposable," "the only volunteers," "some power bloc wants them to go," etc. In the Pathfinder Society, the organized play society for Pathfinder, all PCs have to pick a faction that is then part of the motivating force (and that works behind the scenes to get its agents included in certain missions...).
At a bare minimum, if this has to be a "hire off the street" kind of thing, have them try to make sure that they are at least objectively hireable. I remember one spacefaring campaign where a player's new character couldn't explain any reason why our space freighter crew should hire him. In fact, he was pretty militant about it - we were looking for reasons to bring him on, since he was a PC... "So, what do you do?"
"Things... That need doing."
"Uh, do you have any specific skills we'd find useful?"
"I have many... Skills."
After about 15 minutes of that we took off and left his dumb ass on the planet. (We actually bounced the player from the group too, as being a muffinhead like that was a common character trait of his.)
A breath weapon is a tool to achieve a purpose, so probably they wouldn't. They'd threaten to do something more specific with it, instead.
So, none of these:
- Watch out or I'll sword you!
- I'll get you with my dagger!
- Watch out or I'll breathe on you!
But instead, more like these:
- Are you truly so ready to die? *rests hand on sword hilt*
- I'll give you a second smile! *draws dagger*
- I will roast you and crack your smoking bones. *said while flames glow behind teeth*
- Freeze where you are, or I won't ask anymore. *frost suddenly forms around head*
(Adjust for taste and tolerance of puns, of course.)
If they have a cultural, religious, or pet name for their breath weapon, that'd be an interesting setting detail a DM could add to their world, but still something that's unlikely to be referred to directly in a threat. It would be akin to someone calling their sword “Bloodheart” or something, and always mentioning its name when threatening people — drawing attention to its name at the slightest opportunity would come off as an unusual affectation of that specific NPC, rather than natural dialogue that most people with a named weapon would use.
Best Answer
Depends on the individual location. In general, cities would come to know first, because they have more sophisticated communication infrastructure (more Wizards) and more people travelling there to potentially spread rumors. However, it is unlikely that word would spread quickly unless there was a promotion for the Bard's next performance. So, if your Bard is touring to Neverwinter after Waterdeep, Neverwinter would be abuzz with talk about "the up-and-coming rock star from Waterdeep," but it's unlikely that another city like Luskan or Silverymoon would know, because no one is promoting him there.
If you think that promoting a rock star is only a modern invention, think again; as a landlord or venue owner, there is no point in hosting a musician if you don't promote him so you make more money from the performance. Likewise, if he's not performing anywhere in the city, then nobody would be compelled to promote him. This is kind of a crucial phase in his career because he needs to invest a lot of money initially to get promoted, and this is where the bulk of the cost he needs to pay for his fame would come in. Once he's famous in a region, his name as a Bard will have inherent value due to his popularity and venue owners will want him to perform at their locations, but until then he has to foot the bill for promotion.
Rumors of his performances will spread regardless of promotion later on, but you have to allow time for people to travel and spread those rumors. An unknown musician lives and dies by any promotions he can get from touring, since he can't generate buzz by himself. After he performs in a city, he'd make a lasting impression there -- see also the "Entertainer" background feature "By Popular Demand" (assuming your Bard took this background).
As far as villages and hamlets go, as long as they're near a city where they can actually go and see the Bard perform in a reasonable timeframe, they might well take a liking to him. But settlers of fringe and frontier villages and outposts, such as Noanar's Hold on the edge of the High Forest, probably won't care, even if they do come to know about him. Life in these areas is extremely hard (remember, they have to deal with Orcs, Centaurs, occasionally hostile Elves, etc) and most people don't have the time or means to go see a performance like this. Many of them are dedicated to their hard lives (Rangers, Druids, etc) as well.
I suggest that you track your Bard's "regional fame" as a broad abstraction. The easiest way to do it while keeping it accurate is probably to do it on a regional basis. For instance, if your Bard plays in Waterdeep and Baldur's Gate, word will probably begin to spread to Amn and other nearby areas along the Sword Coast. Consult a map of Faerun after he performs to gauge what settlements his fame would spread to. In the end, it doesn't matter, as long as it's easy for you. Keep in mind where he's being promoted next, too, when he's unknown in a region. You can use this to see if people know about your Bard before he enters a city; you can either roll a check using the Bard's proficiency, or roll a check for the NPCs to know about him. You could even make the DC easier if he's done more gigs in the region. Think of it as kind of a "plus" version of the Entertainer feature, which only takes effect after you've performed somewhere.
Although RAW spell effects might make this somewhat difficult, this is easily within the power of your average hedge Wizard in the Forgotten Realms in terms of lore or fluff. Consult the DMG for help on making a suitable magic item. A three-to-five minute long audio recording with a permanency effect might be a bit pricey, but it's hardly the magical equivalent of rocket science -- if the RAW spell levels are any precedent. Would definitely be a hit amongst the nobility.