[Green-Neck]

I pretty much always hand out 5 points per session. We tend to play 200 point characters for about 6 sessions, so it's enough to pump up certain areas without ending up somewhere crazy.
I don't penalise bad behaviour, or reward good behaviour- I tend to find good role-playing is it's own reward, and poor behaviour is usually results in hazing from the other players.
Also as a player I have had a good session spoiled by being penalised just one point, when I thought my roleplaying was within character. Or perhaps I'm just a sook.