The most important change from Karl surviving would be to Jason. Without the burden of being the Heir, he wouldn’t have grown up nearly as fast as he has. The whole Melawei experience would have changed him, but Karl would have protected him from being in the field after that. No doubt, Karl would have wanted Jason to continue learning the ways of the battlefield, but much slower than happened. Would Walter & Ahira have come back to Home or the Empire? Maybe. Would Jason and Janie ever get together? Probably not. Walter wouldn’t have any reason to be living at Biemstren Castle rather than Home. Jason would have been a lonely, stuck-up kid, rather than a hero-to-be, trying to live up to his dead father's legacy.
Karl's strong personality also would have prevented Walter and Aeia from getting married, or at least would have made it much more difficult. Andrea would never have lost her mind trying to locate Karl and by now would be a much stronger wizard. I don't think Karl would have let her go to Faerie, therefore she’d never have lost her magic ability.
Overall, I believe the empire would be stronger, slavery dying fast, and Jason nowhere near the man he is now. Of course, as reckless as Karl was, he could just as easily died another way soon after Melawei, and then things wouldn’t be so different at all... would they?