Here is a brief overview of Karma as I understand it.

The obvious part of Karma is that by doing bad things, you cause bad things to happen, and by doing good things, you cause good things to happen. There are much subtler ways that this actually works though.

Balance is the state of having no karma, good or bad. This is the natural state of things and is how we are born into this world. By doing nothing, you can sometimes maintain a state of balance and never get any karma, bad or good. In practice this is difficult though, since sometimes situations arise where doing nothing is wrong and will earn you bad karma. So the only way to maintain balance is to either balance your good actions with your bad, or to not ever be in a position to decide whether to do something good or bad.

Intertia means the more mass you have the harder it is to change you status. This works for planets, cars, and karma. The larger the mass of Karma you have, the harder it is to change the balance. If you have balanced karma, but no inertia, a single bad action can have disasterous effects on your karma. If you have a lot of inertia, a little bit of evil won't hurt you.

Having more karma means having more inertia, and whether something is good or bad determines which way that inertia gets pushed. You can't improve your karma by just doing more. That just improves your inertia. Your karma can only be changed (good or bad) by the quality of your actions, not the quantity. But the quantity controls how much damage or how much good a single action can do.

People with no karma are given a little bit of time to get used to things before their karma starts adding up. When you start collecting bad karma, you will start getting slapped on the wrist. You'll get slapped harder and harder until you either notice and change, or the karma fairys knock your ass out.

While karma is a metaphysical thing, it is not the act of any deity (other than by creating it). It is a law of physics, much like gravity. While a deity can theoretically "bless" you, and take away some of your bad karma temporarily, she is about as likely to do this as she is to "bless" you by stopping you halfway down after you jump off a bridge. Deitys may do this kind of thing for their pets from time to time, but most likely nobody else will see it.

One amusing thing about karma is that there's no way to see it. It can be measured, but only by the omnicient. Everyone else has to just guess. Some people just have a natural sense of where they stand, but for a lot of people it follows their ego and self esteem. If you think pretty highly of yourself, it would be prudent to pay attention and watch for those little slaps on the wrist that continue to get worse. That's the only way you can really know where you stand. If you think you're icky, but nothing bad ever seems to happen to you, then you may be in better shape than you think.

One other thing worth noting is the concept of Decay. If people were just fucked when they got enough bad karma, they would never have a chance to grow or redeem themselves. Similarly, someone could store up a bunch of good karma and then just never do anything else, good or bad. They would continue to have good karma indefinately. Decay means that over time, karma tends to move towards balance, if it doesn't get pushed in either direction. So if you have a bad phase, and get a lot of bad karma really quick, the karma fairies may beat your ass - and for a while you won't be allowed to change your karma - but just by waiting, it will eventually return to a balanced state. Keep in mind though that your inertia doesn't change, so when you are allowed to do things again, the natural pull of things will be back towards your original level of good or bad karma. It would be prudent to make sure you only collect good karma at this time.