For instance, I had an idea recently, where if the GM says something like "the bandit stabs you in the heart; you're dead", the player can take narrative control and, if they can give a good reason why it doesn't happen, then it doesn't happen. So I might say "we're fighting on uneven terrain, so when he takes a swing at me, he slips on rubble and it throws his aim off". It doesn't have to be any one particular thing. And then I hand the GM a glass bead or some token that represents what I call the Locus of Narrative Combat, or LNC for short. You don't want to be able to do this indefinitely, so you only have a few. You'd get them back at some point, similar to the way FATE has the concept of a "refresh rate", so they're not gone forever. And over time, you'd get more beads to represent how much closer to his or her Heroic Destiny your character is.
Now, sometimes when someone attacks you, it's could be anything from a superficial cut on the side of your arm to slashing your throat. So we'd have some mechanism of determining a variable amount of LNCs I would need to protect myself; maybe only one for a scratch, but maybe as many as four for a really good shot. And it's more realistic if a sword had more opportunities to stab or bash or cut me when he attacks; the GM might even give it a narrative flair and say that, because he got my weapon in a bind, my enemy was able to punch or kick me for a few points when he wasn't able to before. So we might have to give up anywhere from one to eight LNCs to stop that.
You don't actually have to hand over the glass beads or poker chips, of course. That's simply a convenience. If you wanted to do it the hard way, you could keep track of your LNCs on your character sheet somewhere. If you lost five, for instance, you could just subtract five from whatever your current number is. But that's math, and you shouldn't have to be good at math, or have a desire ever to improve your real-life skills, to have fun in a Narrative Game. So you can just use a big pile of beads for convenience.
The only problem is, Locus of Narrative Combat is a mouthful, and even LNCs is a lot to say over and over again. I thought of calling them your Fate Tally, but for some reason that sounded bad. Calling them Destiny Dots was too alliterative, and implied that you could spend them for other things, and I didn't want them to be just an automatic Success button. So I'm stuck with the term Locus of Narrative Combat, because there's really no better term I can think of for Points that protect your character when they get Hit.
But yeah, Hit Points are dumb.
cheers,Adam