We've had this discussion in our group as well and our opinion was the same as Hypersmurf's and Patryn's. You go up to 1 HP and then back down to 0 HP.
A similar question that came up in our group was:
If you are disabled and cast Cure Light Wounds on yourself, are you no longer disabled and able to still do a move action that turn?
The answer is no. You have all of the actions possible when your turn starts (i.e. only a Standard Action) and when you get healed, you do not suddenly gain a move action because the very act of casting Cure Light Wounds has already used up your entire action for the round.
You can, however, lose an action in your turn. For example, you start your action, someone readied a Slow spell on you, and if you fail the save, you can finish your current standard or move action, but you lose any full round action.