Karma is the 7th stat in B/X or SWN Shadowrun. It is rolled dead last. Humans roll 3d6 for Karma, Dwarves/Orks roll 2d6, and Elves/Trolls roll a meager 1d6. This is to balance out the special abilities that other races get. Elves may seem a little underpowered for the Karma hit they are taking, but remember that in the world of Shadowrun, Elves are the race that don't have to put up with bigotry nearly as much. (In fact, there are even humans who pretend to be Elves out of envy!)
Karma is used to add to attack rolls, saving throws, and skill checks. There are two optional uses for Karma as well: aiding in ability score checks and reducing damage taken.
Attack rolls, saving throws, and skill checks: Karma spent adds on a point for point basis. You spend two Karma, your attack or save gets +2. Now, for your customizational pleasure, I have introduced three flavors of Karma for this usage:
1. Hard Karma: Karma must be declared exactly prior to the roll. If you want +2, you've got to declare you are spending two Karma before the die hits the table. If you would have made it without the Karma expenditure, or if you fail anyway, you've wasted the Karma.
2. Soft Karma: You can declare Karma use after you make the roll. If you're just one point shy of making it, spend that Karma and you've succeeded.
3. Medium Karma- You have to declare that you are spending Karma before you make the roll, but you don't have to declare how much until the roll is made. However, you must spend at least one Karma if you declared you were using it, regardless. (So, if you roll a 3 when you needed 17 to hit, you know you can't possibly spend that much, but you have to waste one for declaring Karma usage. Similarly, if you roll a nat 20, you still have to spend a Karma even though you succeed anyway.)
Ability Checks: If you use the classic d20 roll under system, the Karma points actually subtract from the roll, making it easier for you to roll under your stat. If you use a 3.x DC system or the Target 20 system, they add to the roll. You can go Hard, Soft, or Medium, described above, depending on your taste as GM.
Damage Reduction: Karma spent reduces the damage inflicted by an attack on a point-for-point basis. I recommend going Soft Karma on this one, though you certainly don't have to. It is possible to reduce the damage to 0 by spending Karma.
Those are the uses of Karma. How fast Karma comes back is up to you. You could award Karma at the end of an adventure, say 1-5 points. You could simply state that Runners who survive a run get 1d6 Karma back.(Or some other random amount you determine) Maybe Karma only refreshes once the character gains an experience level. Hell, maybe Karma never comes back. (In which case I'd suggest going Soft Karma all the way) My personal preference would be that Karma refreshes at a new experience level, but your mileage, as they say, may vary.