As of this posting..
-New posters start out with 10 points
-You get 1 point for each post
- 5 points for each thread started
For each 50 points, you get +1 power added to your profile which is the "Reputation Power" score you see when you post.
For each 150 points, a green bar is also added to your profile
When you give rep to someone, you give or subtract to that person the number points which is equivalent to your Rep Power.
So for example, if my Rep Power is 12 and I positive rep a poster who has 40 points (based on say 10 points to start with and 30 points from 30 post), their Rep Power will increase from 0 to 1 after my rep because their points will go from 40 to 52. They will then need another 98 points to get a green bar added.
Negative rep is the same but in reverse. The points are subtracted based on the Rep Power of the person giving it.
There are a couple of other restrictions like not being able to rep the same person twice in row and a max of 5 reps a day to prevent abuse.
For a list of the best and worst rep points of the forum, you can see it listed on the Stats page which is linked above the Users Online in the index page.
Thats should clear up most questions up about the Rep algorithm. The numbers above may change in the future since we are a relative new forum and they are set lower than the default.