[MENTION=4937]Which begs the question: exactly what to AC and DR represent?
All my interpretation; YMMV.
AC represents any of a number of factors that make attacks against you relatively unlikely to succeed - armor, evasive ability, parries, blocked by a shield, etc. DR represents having flesh with actual immunity to damage compared to normal flesh. For example, flesh so hard a knife literally can't cut it, even if you allowed someone to stab you.
Further (and mentioned above), what exactly are the (very few) hit points representing?
In a medium sized character with low hit points, almost all of it represents health and integrity of the body. In a higher HD medium sized character, most of it represents luck, destiny, and skill which thwarts otherwise successful attacks and causes them to do only minimal damage flesh damage instead. So a thrust that skewers a low hit dice creature, is mostly dodged and rendered a minor flesh wound if made against a higher HD character. An arrow that kills a low HD character is dodged at the last moment and only grazes the cheek of a higher HD character. Eventually, the character runs out of luck, stamina, destiny and everything else as a result of his many wounds and is no longer able to avoid a lethal thrust.
Can you lose hit points on a miss?
No.
Is blood always drawn on a hit?
Some sort of traumatic tissue damage, yes. One 'proof' is that a poisoned blade or bite transfers its poison on a hit. Merely swinging in the air near the character might cause them to become tired eventually, but we know they don't lose hit points for otherwise not every hit would have an attendant consequence. Eventually after say 20 rounds of fighting, the characters might become fatigued, but still have lost no hit points. All damage leaves its mark - scratches, bruises, whelps. A high level fighter is a mass of minor injuries when near zero hit points.
And as we learned from dear little Bran, a fall from 30+ feet doesn't always mean death.
Simplified, my falling rules are 1d20/10' divided by the result of a 1d6. Average damage is around 3.5 for 10' of fall, so a 30' fall might well do 10 damage. However, the deviation is massive, because a 30' fall can also do zero damage or 60 (sufficient to provoke a traumatic damage save even in a hero). This is somewhat realistic. A 10' fall can kill, but people have also survived falls from amazing heights. Dear Bran, having the youth template and therefore being a small sized creature would have done even better, with the fall doing 3d20/1d6+1. There are some other complexities but the point is that realisticly 30' falls are usually deadly but not always so.
With only one hit die, everyone's going to hit zero HP sooner or later. What happens at that point?
In my game as you absorb wounds, eventually they begin to take a toll. If you are reduced to 10% of your maximum hit points or less, you are staggered and can take only partial actions. When you hit zero, you begin dying. Dying characters begin 'bleeding out', losing 1 hit point per round. They must also pass a DC 15 fortitude save or fall unconscious, and must make an additional save whenever they take damage - which as I've said they do every round. If they fall unconscious, they remain unconscious until they return to positive hit points (but they would still be staggered). A dying character can stabilize on their own by rolling their CON or less on a d%. They can also stabilize from emergency first aid or magical healing. Stabilized characters are no longer dying, but begin dying again as soon as they take damage. At -10 hit points, a medium sized creature normally dies, though they can be resuscitated by heroic acts of the Heal skill if you act within the first few rounds.
Certain events have a chance to instantly kill or maim you. Traumatic damage threshold for a medium character is 50 hit points. Additionally, any critical hit that drops you to 0 or less, provokes a traumatic damage save. Failed saves means anything from broken legs to decapitation, so a critical can really mess you up. If you are attacked while helpless or if you forgo defense and allow yourself to be struck, the enemy may both call his shot and you automatically take a traumatic damage save.
A character can have various traits and feats that make them significantly harder to kill - 'Hard to Kill' for instance doubles your chance of stabilizing on your own and increases the number of negative hit points before you are dead by your character level. If you want to play the sort of character that is left for dead, and recovers to wreck his revenge, 'Hard to Kill' is the trait for you.