Yes, you can blink and possess your way through Dishonored without extinguishing a single digital soul. Zero kill playthroughs are possible, Arkane developers Harvey Smith and Raphael Colantonio confirmed via a recent AMA (ask me anything) chat on Reddit, and not taking people off of the Dunwall census will have an impact on the game world.

Not killing anyone in Dishonored should pose a formidable challenge. After all, it's a game where you play an assassin sent on various missions to assassinate people. If you do choose to become a Scooby-Doo meddling kid instead of an assassin, Arkane said it won't really impact the overall play time of 12-24 hours (depending on how many side missions you accept and how much exploring you do).

A couple of other interesting questions and answers from the Reddit Dishonored AMA:
Q: Is Dishonored open world, or linear with a variety of options?

Arkane: No, Dishonored is not open world, it is mission based. Each mission is built as a mini sandbox, so the missions are open and offer several paths and approaches.

Q:Can you tell us about how player's actions and Chaos affect the world and narrative? Is it pre-scripted or more dynamic like low and mid-level gameplay?

Arkane: It's a bit of both. For most players, the effects over the course of the game will be fairly subtle. The mission checks the current level of Chaos so far and the following can happen: More pools of rats, more people with the plague (weepers), lines of dialogue/attitudes changed, additional scenes here and there, and different endgames. Things like the rat pools feel like 'mid level gameplay' as you say. Lines of dialogue are obviously a scripted reaction. There are two main endings, but each has variations based on who lived or died. Some of the Chaos effects are meant to be 'felt' more than overtly identified as they're happening.

Q: Will you be able to use any of the environment, like vases, frying pans and the like as a weapon?

Arkane: Some of the objects you see in the environment are movable and can be flung at characters.

Q: Will the PC version offer gamepad (360 controller) support?)

Arkane: Yes.