I think regeneration should be like oblivion, where health doesn't regenerate on its own and magicka does. I think healing through waiting should be like MW where it isn't 1 hour for full heal, you actually have to rest for a decent period of time. On a side note I really hope fatigue doesn't degenerate like in MW while running

But don't you get fatigued while running long distances?

Recharging Magicka but not Health.

You explained it better then I could. If they don't change, the problem will just get worse in skyrim though. They are switching the way you wield things. You get two hands and can carry anything in your too hands. This leads to all kinds of style possibility sword and shield, sword and dagger, dagger and fireball. It should give you a lot of verity, but not if your healing spell is the most useful and most needed. All your style choices become and healing. Sword and healing, shield and healing, fireball and healing.

If resting is not going to restor health (or atleast not restore it as quickly as in 1 hour) then food should be more avaliable to restore health, more readily avaliable food would also be required for the cooking thing

Voted "They should not let health or mana regenerate", although with a major twist - the three split bar system:
Health - Lower : Critical wounds. You simply cannot heal these, not even by magic or potions. However they are not frequent to get. Increases also very slowly with sleep deprivation.
Health - Middle : Available Health pool. These can be healed in any number of ways, incl sleeping, but does not regenerate.
Health - Upper : Stun damage. If you miss the nail and hit your hand, it hurts like hell, but it's not a health issue. This regenerates automatically.

Mana - Lower : Permanent damage. Includes damage spells. Increases also slowly each time you cast a spell, but cannot be regained with potions or absorb.
Mana - Middle : Available Magicka pool. The amount of magicka points you have left, after subtracting the lower and upper part. Does NOT regenerate automatically, you need potions, absorbtion, or sleep. With Atronach, you don't even regenerate while sleeping (like in MW).
Mana - Upper : Temporary damage. Include drain spells. Easy indication of what you will regain when effects is complete. This regenerates automatically.

Fatigue - Lower : Permanent damage. Includes spell effects. Increases also slowly by not eating. Allow it to top, and it starts affecting health.
Fatigue - Middle : Available Fatigue pool. Good indication of how much damage you will do with a weapon. NOTE!! May not be higher than health.
Fatigue - Upper : Fatigue loss. When you do something, this increases lowering middle part. This regenerates automatically.

Effects of drinking appropriate potion:
Health - Increases Available Health pool, but does not affect Critical wounds or stun damage (stun damage fixes itself quickly, it's used for KO).
Mana - Increases Available Magicka pool, but does not affect Permanent damage or temporary damage.
Fatigue - Increases Available Fatigue pool, and acts as a power drink to temporarily reduce effects of sleep deprivation.

Effects of sleeping:
Health - Does not repair damages from critical wounds, but heals everything else incl effects from sleep deprivation.
Mana - Needs a restore if everything is to be fully regenerated during sleep. Otherwise permanent damage from damage spell will remain.
Fatigue - Restores everything except Permanent damage caused by severe lack of nutrition. Pays to eat before sleep.

Effects of eating:
Health - None except the secondary effect of not loosing health as quickly as when you were starving.
Mana - None whatsoever.
Fatigue - Reduces the effects of starvation, depending on the quality of the meal.

Duration of sleep:
Depends on your restoration (regenerative) skill and quality of bed. I'd expect a few hours in your own mansion bed, and several days in a sewer.

Perks:
There should be perks available for those not wanting this level of survivalism, where certain things are handled more automatically and conveniently.

Level:
As you grow more experienced, the bad effects limit themselves, but never go completely away.

Keep in mind the early levels are said to increase rapidly, so there should be plenty of time to get the perk before you even start getting annoyed. It's not supposed to end up as a "sleeping fest", more a "something to keep in the back of your head before going to a potentially fierce battle". I mean, if you show up starved and deprived of sleep, it just makes sense that you should be punished for it, right? In Blade of Destiny, you had no regeneration, and you only gained a point or two per night of sleep. Do you want to assist the guy hurt along the road? Makes a pretty important decision now if the spell cost 4 points requiring more sleep, doesn't it?

Lastly, this need for sleep artificially helps game time advance. At normal difficulty, it always feels weird being around level 40 after three months. Waiting could have todays interface, but sleeping should have a more convenient one, where you simply see time speed by really fast.

I'm not too concerned with the health system as you describe it, I think Oblivion's was okay, however I would like something along the lines of a necessity to eat, drink and sleep somehow incorporated with health, or especially with fatigue/stamina. I however am quite concerned with spells that heal your allies/horses/etc., it was very difficult to aim a healing spell at them, as sometimes I would accidentally heal my enemy! It should be easier, and also, maybe something to "help" with friendly fire, although I do like the realism in that you can actually hit your ally accidentally. But with magic you'd think it would be quick and easy to heal an ally, but it is this wierd orb thing that flys at them, instead I think it should have an auto lock system.

The major benefit with a three split bar system is immediate feedback, without having to use character screen. If you wake up and see any bar in unusual state, means something is up. Did you get hit with a damage health spell? Did you catch a disease? Would love to get rid of the messages "Boink, sorry pal, you just got the flu" - "Insta potion", ridiculous. They used it in some tactical UFO game; you could get stun damage that knocked you out but you regained conciseness quickly, you had normal health that could be fixed on the battlefield, and you had critical damages that you needed sickbay for for a fairly long time. Here you can choose to go to a medical facility, or choose to carry on with a slightly lowered pool of health. Players choice. If fixable with magic, then it becomes too simple and serves no real purpose. Like diseases I might add.

They could make it so that:
Sleeping heals all wounds
Potions heal instantly
Food heals over time
Altars heal in 10 sec
Waiting heals to some point (Not completly)
Spells ofcourse heal instantly

Mana regen. is a must! Playing as a mage without having mana regen. greatly weakens every such character. It was one of the greatest flaws in Morrowind and I′m glad they changed it for Oblivion.

Health regen., well, seems wrong. Maybe it could be a perk for characters with really high endurance.

we are not trolls so only mana regeneration should be possible.

Magic should regenerate, but at a VERY VERY slow rate. Getting the crap beaten out of you and calling upon mystical wells of power to destroy your enemies with a magical nuclear bomb should have longer-lasting ill-effects on your character than just having to stand there for a minute and feel all better.

Or better yet, have magic not be able to regenerate unless the character is still/relaxing, and have it regenerate much faster while sleeping. Using magic always seemed to me like a concentration/mental thing, and running around doing lots of stuff wouldn't be very relaxing or soothing on the mind.

Seeing as we are playing a member of a special line of dragon slayers who can speak dragon, I think they can make up a good reason for us to regenerate health. The question is not about lore but game play.

I like the idea of regen-no regen based on how hurt you are, but I'd tweak the other way around for the sake of gameplay. If you in the bottom of a dungeon filled with enemies with no magicka left and no potions left, you dont want to be getting even worse by the second....

I'd have it like this:

Low Health: Health automatically regens when not in combat to one third of max health.
Medium Health: Health can be restored by food or by sleeping to 2 thirds of max health.
High Health: Health can only be restored by usual means: Altars, Spells, Potions, Scrolls.

I selected others.

Mostly, for me it depends of a lot of thing that have changed since Oblivion.

Depends on the Magicka pool size. Regen is needed if it can't grow with level (which we already know will happen in Skyrim) and if spell magic cost don't reduce when you raise the appropriate skill (or through perks). You can't play a proper mage if you run out of power after 2 spells and need to drink a potion every minutes. So this is more a question of balancing.

As for health, I don't mind slooooow regen when your weapon is sheathed, but I prefer potions and spell having a meaning.

I think you may be on to something with the bolded items. Perhaps make the more serious injuries healable only through special methods like healing at a shrine, special alchemy, or a spell that stunts your magicka until healed by a shrine. It would more resemble the healing methods for a disease or stat debuff in Morrowind/Oblivion. This would allow the player to perform small-time magicka- or time-to-health conversions in between battles, but have to return to civilization OR use special skills to heal serious wounds.

I think we should have spells that regenerate magicka and others that regenerate health. But health regenerating spells should only be usable when not in combat.
Maybe a perk for spell-casters could enable healing in combat, but healing in combat comes at a high magicka cost because of the pressure of battle.

I'm cool with oblivion's way.

I think this is pretty universal. As others have stated TES is about immersion. We like it to be realistic fantasy. What you proposed, which I wouldn't call regenerating, is that we get fully healed after every battle. That would make things way to easy, so to balance it out you'd really have to soup up the battles. It'd also take a lot away from stealth type players. Not to mention other players on the verge of dying should feel the need to flee. Recharging Magika works and makes sense. Regenerating health, makes sense only over a long period of time, such as sleeping.

I don't know if someone mentioned it, but in F/NV you could get a perk that gave you a very minor HP regenerate. It made it possible to restore health by waiting without making an impact on combat. I think it was about 1 hp every 5 seconds.
Personally I like it as it is, but I thought I should mention it.

I think both of them should regenerate s l o w l y. Yes, mages are crippled if they don't have magicka, but warriors are crippled if they don't have health. And if your Magicka regenerates faster than health, you can just spam healing spells. I think fast health regeneration is a kind of super power that should be reserved for creatures like Vampires and Werewolves. On the other hand, if they don't regenerate at all, the action of the game gets slowed down, which isn't bad because then it forces you to take a break head into town, lick your wounds.

I think that health should slowly regenerate. Otherwise you either wait an hour between each battle or use spells and potions.
Now if there was very slow regenerating health, waiting for an hour to heal makes sense, because sitting in game time for a few minutes would do the same.
It would have to regenerate slow enough to be innefective for in-combat healing.
What was the point of being a pure-warrior if you end up using a weak healing spell between fights?

Magicka should also regenerate, that worked fairly well in Oblivion. It may need readjusting.

So waiting now fixes absolutely everything? Naah, no regeneration and sleep (rather than wait) to restore. It's a great way to bring time into the game which is now completely lacking. As I've said earlier, being able to reach level 40 in 3 months is plain nuts. That should have taken years to achieve. Waiting lets time pass like today, but sleeping (until fully rested) passes days instead of hours but at the same speed for the player.

If spells could fail, like in morrowind, regenerating magicka wouln't be much of a problem

no. NO! (continues to sound like a sore crybaby about this for several more minutes)

in all seriousness though I really do hate the regenerating health concept no matter how it is implemented. It tends to make games way WAY too easy and even if your method seems like it might work there'll undoubtedly be some exploit or a flaw that can be found in it.

as a matter of principle I staunchly oppose health regeneration

that's just me though