A deafened character is unable to hear. The character automatically fails Listen checks, has a 20% chance of spell failure when casting spells with verbal components.
Deafened people cannot be affected by a Bard's songs, or even certain spells which require you to hear its effects. Being deaf does not automatically protect you from sonic damage, as this is caused by sound waves whether they are heard or not.
It is unconfirmed as to whether the character takes a -4 penalty on initiative checks.