Humanity is one of the elements that makes Vampire so distinctive. It’s a combination of “alignment” but more importantly it is a way of visualizing one of the key struggles and conflicts in the game—the push and pull between ones previous mortal concepts and the ravenous beast that now inhabits you. I don’t think one would be out of bonds to say that it is the corner stone of Vampire, and what makes it a game of “Personal Horror” rather than just a monster game (or a “dark superheroes” game).
Given how key it is the very foundation of Vampire, I’m rather ashamed to admit that it doesn't play much of a role in the games I’ve been involved in. I've only been in a few games where the Storyteller really focused on Humanity, but it ended up just feeling punitive in that we’d lose Humanity points for committing any sin, regardless of our ratings. For example, despite having a concept of “cat burglar” and a Humanity low enough that I didn't need to worry about stealing, I still automatically lost a point for hot-wiring a car when we were on the run from our foes. I also lost a point for consuming more than a blood point off a victim (3 points, for those who care), even though we left our victims in a hotel room and called 911 for them before we left. The other players fared worse, dropping from a 7 to a 3 in one case, despite trying their best—in this Storytellers eyes, killing some ghouls who were sent to kill you was enough to cause a drop in your Humanity. We ended up fleeing to the Sabbat, both because we weren't sure we’d retain our sanity another night of being vampires, and as a “screw you” to the GM.
In another game, a couple of fellow players and I really wanted to explore Humanity, but it wasn't something that the Storyteller was terribly interested in. Which, seems to be the norm in a lot of games I’ve played in. Either Humanity ends up being a cudgel that you get beaten with for misbehaving, or it’s just kind of there and never even comes up. I've tried making it more of a factor in my games, but I fear that it ends up on the punishment end of things rather than anything fun or interesting. And, really, it’s not much of a punishment—once it gets low enough, you get “rewarded” by being able to do whatever you want and the Storyteller not giving you a hard time about it. The only downside is when you have to wake up or do something during the day. And even then, if you have to make those rolls, you’re probably pretty well boned anyway. And I've certainly never seen anyone actually spend XP to increase it!
As such, I've sort of come up with my own way of using Humanity in a game, both as a player and for when I run NPC’s. Essentially, instead of treating it as a binary system (in which things above your rating you have no problem with, but those below are utterly horrifying and risk driving you mad), I treat is as a spectrum for role-playing. Basically, I view it as a +/- scale. Anything that’s Humanity +3 or more is a moral that my character would concede in a philosophical debate to be “good” but, come on, he lives in the real world. Humanity +2 is something he wouldn't normally do, but if we was in a foul mood or under stress he would—he might even feel a tad bad about it afterward, but it wouldn't really bother him. Humanity +1 is something that he would do easily in a crisis or if he were in a jam, but certainly not normally. At Humanity rating he hits his first real challenge. He’d cross this line if his life or someone he cared for were in danger, but it would be with significant trepidation. Humanity -1 would be done in only a significant dire situation, and even then would try to find another way. Humanity -2 would be an act he would only consider in a “kill or be killed” environment, would try to find another way, and if he had would result in significant soul searching. Anything of Humanity -3 or more would be beyond pale, and inconceivable for this character. Committing such an act, even unintentionally, would permanently scare this character, and he would never be the same again.
To clarify, below is the Hierarchy of Sins
Score Moral Guideline
10 Selfish Thoughts
9 Minor selfish acts
8 Injury to another (accidental or otherwise)
6 Accidental violation (drinking a vessel dry out of starvation)
5 Intentional property damage
4 Impassioned violation (man slaughter, killing in frenzy)
3 Planned violation (outright murder)
2 Casual violation (thoughtless killing, feeding past satiation)
1 Utter perversion or heinous act
(I believe this are the Revised Edition Hierarchy—source)
So, let’s say I’m playing a fairly moral character with a Humanity of 7. “Selfish Thoughts” being a sin is an abstraction to him, not something he would ever really think about. I mean it’s not like he’s ACTING on it, or anything, right? “Minor Selfish Acts” like saying hurtful things to make himself feel better or minor lying that helps him out without really affecting someone else is something he’d do if he was in a foul mood or if it was mildly in his interest—Dominating a cop to let him go rather than ticket him, for example. If he felt any guilt at all if would be minor, at best. Injuring another is certainly something he doesn't normally do, but if he needs to put the hurt on someone who’s threatening him, he’d do so. Probably wish he hadn't been in that position afterwards. Stealing is something he would not do as a matter of course, but if he needs to steal a car to get out of a tough jam or swipe evidence that could incriminate him he would. Accidental violation is by definition an “accident” but he would only be so reckless in a desperate situation—if he has any control of the scene, he would do his best NOT to drain a vessel or kill someone, even in a fight. Burning a place to the ground would be the limit of how far he’s willing to go, and he would need to be pushed to the breaking point before doing such a thing. Any kind of deliberate killing would be too much for him.
So, yeah, that’s how I play my characters. I tend to explain this to my players as a broad outline, and use it as a way to judge “role-playing” XP rewards. I never really bother with having players “buy” more Humanity, but rather judge their role-playing and, after talking with them, adjust it at Storyteller fiat. I don’t like the idea of just “buying off” sins; I feel like Humanity gains or losses have to be earned. If they've been taking the harder road and really pushing to be more moral, I want to reward them with both a higher Humanity and more xp—after all, it’s harder to be moral than immoral, and the World of Darkness is already stacked enough against the righteous.
Another way to view this is “if you want to power game, be moral.”
Of course, a number of players aren't interested in really exploring Humanity or morality, and that’s fine. It’s a game, after all, and people should have fun more than anything else. For them, I just say to set their starting Humanity where they are comfortable/what they want to play and we’ll go from there. Some people dive right down into the lowest Humanity they can get, but most are more reasonable.
Even after writing this I feel like I’m not “getting” Humanity, though. It’s one element of the game I’d like to get better at, and be able to use as a tool to make the game even more interesting and fun. I’m just not sure how to do that though.