If one tries to think about realism, hit points are unsatisfactory, but in gameplay terms, I like them. They allow you to face greater challenges as you level up and they make damage incremental rather than spikey, so that you don't die (or get crippled) too abruptly, but can flee if things go pear shaped. Yes, I know some people like games with "one hit, one kill", crippling wounds and fights you die almost immediately on walking into (e.g. a Morrowind sewer encounter at low level). However, I find them intensively frustrating and make the experience very gamey as, let's face it, you are just going to hit reload and nothing is more immersion breaking than that.

Of the alternatives, I find the "get better gear" solution unsatisfactory. Gear - even more than the human body - is constrained by physics. A bloke in full plate is in trouble against even two opponents who grapple him. I don't know enough about modern armour, but some of the weapon upgrades in Stalker seemed patently unrealistic (e.g. NATO assault rifles being massively more lethal than a basic AK74). Yes, you could make the armour magical but I prefer levelling up my character's attributes than his gear. Saying my character is harder to kill because he is experienced rests better with me than saying it is because he bought uber jewellery on the auction house (MMO players will know what I am talking about). I think the DnD/D20 system balances the loot and gear side well, so that a "mere" +1 upgrade is a big deal.