While it was a neat idea in the first Halo (they called it a 'Shield level' and you still had a physical health level that needed health pack pick-ups) I personally think regenerative health in games makes for a dull experience. I've been playing through the first Far Cry on my PC again, and part of the experience for me is having to use an air of caution when I'm rounding an unfamiliar corner and my health is low, or the absolute JOY when I find a body armor vest. Modern shooters don't have that, in fact, a lot of modern shooters make me feel like I'm back to playing DOOM on God Mode, except I'm not 12 years old any more and I would like a big-boy challenge with my purchase, please.
Here is a great article on regenerative health by Yahtzee of The Escapist Magazine. He hit some real points that I hadn't thought of, but were rather kicking around in the back of my head in the "this doesn't feel right" section of my brain. I see regenerative health (among other things) as hand-holding, and frankly, it's hard for me to have an immersive experience as a bad-*** taking out waves of bad guys single-handed, when I apparently have the life force of a Norse God.
Maybe they'll eventually just make a game where if you leave it running for 70 years, the AI dies of old age and your immortal self wins by default... Or we could go back to fun, challenging experiences that make us think. Your choice, Ubi.
To me it's one of the main unique characteristics of FC2 that makes that different from other games. So, I'd definitely like to see it in the game, only that it could be more restricted, like a certain amount of time has to elapse, until you can do that again or something like this. (Or for example, it could be restricted to the number of bondages you carry, that you can pick up at ammo piles.)
Pure Health Regeneration would ruin the game for me. I like the suvival type aspect of Far Cry and regerating health is way too easy and unrealistic. However Far Cry 2's "Semi Regeneration" wasn't that bad but it would be cool to have the option to turn it off completely.
With regards the single player: I'm playing another campaign in FC2 at the moment, and I'm not using the Syrettes. I only allow myself to restore health by finding one of the bottles that are lying around, or sleeping in one of the safe houses.
Ideally in FC3 single-player, I'd like the regeneration to be optional, but if it's as it is in FC2, that's ok as I can just choose not to use it.