Speed Factor is along with Attacks Per Round (APR) one of two factors that determines the "speed" of combat. Combat within the game is based on rounds. Rounds are each six seconds long, and the Speed Factor determines when within those six seconds the creature will strike. The lower the number means it will strike earlier, with 0 meaning instantaneously, 10 meaning at the end of the period. Therefore, regardless of how fast or slow the weapon the creature has, the Speed Factor only determines when it will strike within the round, not how often. The "how often" part is solely determined by the APR.
To elaborate, take the basic Two-handed Sword as an example, this is a huge and heavy weapon with an appropriately low speed factor of 10. When you issue an attack command to a character with 1 APR who's wielding the weapon, in each six second round they will attack once, and that point should be set to the end of the 6th second in the round (as the attack animation itself takes 1 second, in order for the attack to complete within the round, the game will allow the character to start attacking at roughly the end of the 5th second and finish the attack animation just at the end of the round).
Now let’s take a look at a level 13 fighter with 2 APRs wielding the same weapon, the round itself is still six seconds long, but with two attacks this is now split into two three second periods. The weapon will still strike at the very end of the period, but now this will be the end of the 3rd and 6th seconds (again, with the animation beginning slightly ealier to allow the blow to land at the right moment).
So what happens to having more APRs? There’re weapons like Belm that give +1 APR, an Improved Haste doubles APR, and there’re Greater Whirlwind High-level class abilities (HLA) that set APR to 10, the maximum amount the game allows. Well, you’ll never exceed 5 APRs no matter which weapon combination you choose or how you wield them, as for IH or GW, the game actually splits one round into two (3 seconds each) and doubles the attack animation speed (0.5 second each) under their effects. Image a fighter wielding the same weapon activates GW, for the first 3 seconds, s/he has 5 attacks to complete, the animations will take up to a total of 2.5 (0.5x5) seconds, assuming no pauses between them, so the speed factor has only 0.5 second period to factor in, which is almost neglectable. Speaking of GW, the noticeable delay after the HLA activation will surely make its effect go off before the 10th attack finishes, a slight oversight...
To sum up, Speed Factor is notable for characters with low APRs, but matters less for characters with high APRs.
Things that affect Speed Factor:
- Weapon type
- Weapon enhancement level, usually is equal to the SF bonus
- Weapon proficiency, High Master -1, Grand Master -3, Two-Handed Weapon Style -2 or -4
- Class kits, Kensai reduces SF by 1 every four levels
The game also rolls a random initiative factor each round so that even with a worse speed factor, attack can come first.