Sir Robilar - check out 3:16 Carnage Beyond the Stars for something that looks a LOT like this. It's a bit different though. In 3:16, the player has 2 Flashback slot2 (he can gain more later) one is a Strength and one is a Weakness. At any point in time, the player can declare a flashback, either as a Strength or a Weakness. If he declares a Strength, he wins the current encounter on his terms. The player gives a short description of the flashback and how it relates to the current situation. He then wins the encounter on his terms.
A weakness works the same way, but, this time you lose on your terms. So, instead of the orc killing you, he captures you.
Once you declare a strength or a weakness, you keep that for the rest of the game, although it has no more mechanical effects. But, that descriptor, whether strength or weakness, remains with the character and adds to the personality of the character.
It's a really excellent way to build on a character's personality in game.