Regeneration is, for the most part, I think better for action games. I used to hate it but really, there is no way to justify health packs curing battlefield damage, etc. and with regeneration I just assume I was only grazed and found cover.
Really the only plausible way to get through any shooter is to assume you never really get hit - i.e. you're the soldier who survives by dint of not being hit. No matter how much they evoke battle videogames require you to be able to survive to the end of the campaign and are not in the least realistic with damage.
For survival horror it's got to be health packs, and they should take time to apply. They should also be in sparse supply (at least on harder levels).
IHMO anyway!
EDIT - I would love however, to see a hardcore SF FPS that had no regeneration or health packs. If you get damaged you stay damaged until... you make it to an advanced regeneration chamber that heals you. In essence you have to survice through large portions of each level to make it to the regen point or you start again. Ah... fond memories of AvP titles where on HC you had to make it through the level without dying or it was back to the beginning. Sparse health and no regen.
OT - the game looks very sweet. Can't wait to play it.
Try to be reasonable... its easier than you think...
