Is it possible to change the hostility level of one government to another in the middle of a scenario? So two governments whose ships will initially destroy each other on sight, will instead be friendly to one another.

You could make duplicates of all the ships and dudes and then swap them when the time comes using the AppearOn field.

Yep, there are two different Wraith governments in Nova, for example; a hostile-toward-Polaris and a friendly-toward-Polaris.

mm hmm, the only way is either to swap out everything having to do with the govts, or, my preffered way, just make it so they mind their own business and dont end up in eachthers systs. They would still attack eachother in eachothers systems, but they would just never end up in the same system. For added grins, you could add the diplomatic or whatever govt thats allies of both and creates friendly ships in the opposing govts system for like the traders and whatnot.

One problem I'm running into with this is, if you swap out every system with visibility bits, doesn't that eliminate your ability to have those systems be random destinations for missions?

Let me be more specific. Assume you have two governments called Red and Blue. Each government has five systems with habited spobs called Red1, Red2, Red3, Red4, Red5, and Blue1, Blue2, Blue3, Blue4, and Blue 5. At some point, the story has Red and Blue become one government, call it Purple. The 10 systems also change to be of government purple, with the help of visibility bits.

Doesn't this create a problem?

You can't have random, take this cargo from RedX to RedY, because every system has a visibility bit. Even after the systems change to be of Purple government, you still can't have random missions like the one described above.

I've been wrestling with this problem. Any suggestions on how to work around it?

No, thats not the way I like to implement this sort of thing. I leave the govts hostile to eachother, I just make it so the dudes for the attack ship never appear. The govts still hate eachother, but they never have a chance to prove it. Addition of a new govt (probably mostly traders) flying ships of both govts in both systems and friendly to both would make it look like more of an alliance.

You dont need to visbit any systems, and if you need to change the Descs, use {b*** "....." "....."} to replace it at the appropriate points.