How about an option to transfer Karma directly to posts/comments? Perhaps to have the transfer be public (part of the information of the karma of the comment). This may allow some interesting "trades" such as giving prizes for answers (say, like in stackexchange) or have people display more strongly support for a comment.
Damn.. As stated, when people can pay to put Karma in posts, there is a problematic "attack" against it. left as an exercise :)
I still think that Karma transfer between people and prizes on comments/posts can be very interesting
Karma is awarded definitely as a recognition of the usefulness of the contribution. The user's overall karma is an unprincipled straight addition of those "usefulness scores". Still, it's the closest thing the site has to it's trust in the user and we use it to award: a) More influence in the form of higher-powered votes b) More ability to moderate one's own posts (ability to moderate personal blogposts at 50 karma, and those that have been promoted to the frontpage or community at 2000)