the NO HIT areas are the head, neck, and groin.  If someone is hit in these areas, as will happen from time to time, the hitter will ask the hittee if they are alright.  If they are and no damage is done, the hit is ignored and fighting can resume.  If the person who was hit is unable to continue playing, they should stop to rest.  There is no penalty for an occasional illegal hit, as it happens to everyone, but if someone does it too much they should be asked to not play... or depending on the civility of everyone there, they just might get their butt kicked, although this is NOT my suggestion.

the HIT areas are arms, legs, and body.  When a hit occurs, a point is lost in the area hit.  The usual way to start is with one point for each area, although different races, classes, or higher level characters can have more.  Armor also adds points.  When there are no more points left on an arm, you may not use that arm anymore (you may have to switch your sword to the other hand).  If all points are lost from a leg, that leg is no longer usable.  If both arms are lost, face it; yer gonna die.  If both legs are lost, go to your knees.  You can still hobble around, but not walk.  If all the points on the body are lost, you are dead, and must follow whatever death rules you are using.

Some ways of dealing with death are as follows:
Valhalla:
for this, when a player is killed they leave the playing field and go to a place designated as Valhalla.  There will be a stopwatch at Valhalla, which is used to determine when the players may return to the game.  Sometimes each dead player must wait a certain length of time (60 seconds usually), and other times all dead may return when the watch beeps for the first one there.  In other words, if one player died, and was the only dead at the time, he/she would start the watch.  If, about 40 seconds later another died, he/she would only have to wait 20 seconds, until the watch beeped.  This allows all dead to return to the game at the same time.

Life Chips:
This way, poker chips or something similar are used.  At the beginning of the game each player is given a certain number of Life Chips, say 5, and whenever they lose a life, they give a chip to their killer.  When all the chips are gone, they are out of the game until point.

Here I will describe 2 basic scenario types, and what is required to play.

The first type is Capture the Flag, which is a simple combat scenario used by all manner of Live-Action players, including paintball and laser tag players.  Here of course, we are talking about medieval d&d style gaming though... with swords instead of guns.  For this, all that is needed is a group of people, enough boffers for each person, two flags, and a field to play in.
Click for a description of boffers, or instructions on making boffers.

I would suggest 4 or 5 people on a team, although more works too.  If there are enough people, more than two teams might be a good idea.  Costumes (garb) aren't necessary for capture the flag, as it is more of a military exercise than an actual RPG.
For the playing field, a public park works well, as long as you can find an area free of picnickers and such.  If there are cops patrolling in the area it might be a good idea to let them know what your doing so they dont get upset.
The purpose of the game is to capture your opponents' flag from their base, and return it to your own.  This is accomplished by slaughtering the enemy if they get in your way.
 

The second type of scenario is Rescue the Princess (or Steal the Treasure, depending on what the exact prize is).  For this, instead of dividing into two teams with opposing goals, a few players are chosen to play special parts, like monsters and such.  Once again you need a group of people, boffers, and a field to play in. This time, you also need a few props, such as a princess or a treasure box or whatever.  You will also need ribbon and nails.

To prepare to play, use the ribbon to draw out a full size dungeon or castle floorplan on the ground, with nails holding the corners down.  The Castle should have at least one entrance, a few corridors, and an inner sanctum.  Start the game with the special players in the castle, prepared for attack, and the other players at a designated starting place about 20 or 30 feet from the castle.
When the game begins, the players (individually or in teams) will storm the castle, fight thier way to the inner sanctum to kill the 'boss' (demon, fiend, shadowkin, or whatever) and retrieve the treasure, then fight their way back out and back to the starting point.  Only one person or team may win, so once the specials have been defeated, the players may fight amongst themselves for the treasure.

The very first game I played was as follows:
A steal the treasure scenario with a small castle guarded by a fiend (2 points each limb, 3 body, weilding a large 'fiend claw').
here is a map and description:
 
 

A) the Portcullis.  It takes 2 people to lift this, so to enter OR LEAVE you must have a friend, at least for a moment. B) Pits, 20 feet deep.  The edges can be climbed with a 20 second count (stand there and count 20 seconds) more or less depending on race and class.  A fall will break both legs. C) Crushing Trap.  Anyone within the square when the trap is activated will lose a point from whatever body part is within the square. D) TouchPlate.  When this mark is stood upon, the Crushing Trap is activated. F) this is the Fiend, standing in the inner sanctum, guarding the treasure T) this is the treasure

The Portcullis is a nice touch, allowing for some good role playing to convince someone to help you.  The Crushing Trap was just evil, as the fiend would try to maneuver those fighting him into the trap, then leap back to activate it.  Once the fiend was dealt with, the trap was useful for anyone cornered in the inner sanctum.
For this game, we used the Valhalla method of dealing with death for the players, but death for the fiend was permanent until point.