Here's how I currently use them in my Werewolf: the Apocalypse game.
The GM starts with cool points equal to 5x the number of players. My games usually have 4 players so that's 20 cool points. If the players start a fight with an NPC or each other, that's on them, but if the GM throws some hardship at them, it's paid for with cool points.
1 cool point allows me to 'buy' a threat, obstacle, or opposition that's roughly equal to the PCs themselves [3 12th level ninjas vs the three Level 12 PCs]. Each additional cool point buys additional baddies or increases their potency.
Once the threat or encounter is overcome, the cool points used to create are distributed to the players evenly. Any remainder sits in the center of the table!
Additionally, each player starts with a number of cool points himself. This allows them to grease the cool point wheels before they hit the first conflict. In my Werewolf game, they start with 1 cool point per Rank. This is roughly equivalent to Level/4 in a d20 game.
Whenever someone does something 'cool' at the table, another player can throw them a cool point as recognition, from the 'remainder pot' on the table or their own stash. In my games, they're handed out for everything from badass dialog to hilarious jokes and even tasty snack contributions. Players are encouraged to reward cool points for anything and everything that makes the entire rpg experience more fun for them.
Note that players are equally encouraged to reward the GM with cool points in the exact same way. Likewise, the GM can reward players with cool points directly.
At their most basic, cool points can be spent on any roll for a small bonus. In my Werewolf game, this means they can roll 1 extra die. Cool points can even be spent after a roll has already failed, in hopes to turn a failure into a success. Cool points awarded to the GM can be spent the exact same way. The GM can boost an NPC's roll by spending a cool point.
Cool points spent to modify a roll are always given to the player that was targeted by the roll. If you use a bonus against him, he gets the cool point after you spend it. Points used against NPCs or the environment are naturally handed back to the GM. Points used by the GM against players are handed directly to them after the roll.
Outside of rolling dice, cool points can also be spent to make major or minor plot alterations. The GM can obviously do this for free, but players need to spend cool points to alter things normally outside their character's control. Call it 'dramatic editing' or whatever you wish, but it simply allows characters to find a handy garbage chute when they really want one.
Making more significant changes requires more cool points (players can all contribute), but here are some basic guidelines.
- 1 = Minor/Insignificant Change - The necromancer should be a chick! That'd be cooler.
- 4 = Meaningful/Significant Change - I think the prince should have a crush on me!
- 7 = Major/Serious Change - The necromancer is in love with the prince!
- 11 = Grand/Enormous Change - The necromancer IS the prince!
Cool points can also be used as a 'soft compel'. It's soft because the GM forces nothing on the player, nothing they must buy their way out of. It's just a way for the GM to add incentive to a particular course of action or inaction. [Seriously guys, we can't have him as a recurring villain if you don't let him get away this time. How 'bout 3 cool points and he walks?]
Players can also bring this on themselves. Anytime they willingly disadvantage their character, they take a cool point for their trouble. [My ankle never healed right after that last fight. Looks like the assassin gets away. Darn, I guess we'll be seeing him again then!]
Any cool points left in a player's hands at the end of a session become bonus XP. This is partly to reward players that earned so many cool points and partly to limit their flow around the table. If all cool points got spent on dice rolls, game 'balance' might suffer. If they all get spent on plot changes, the fiction could get too tangled. A reason to horde them seems to be almost as valuable as a reason to spend them!
That about does it for cool points, maybe I'll encourage my players to chime in with their opinions of how all this works at the table!