Health points keep your character alive in combat. If you reach 0 life (HP), your character is removed from the battle. If everyone on your side is defeated, you character may die; see death for details. If this does not happen, you will be restored to 1 HP when the battle ends (unless you received a level as a result of the battle).
The initial Health Point value at level 1 depends on the character's Class. Vitality affects HP. Every level beyond 100 gives +10 life.
Life can be restored by using certain items, the Emote /sit, Emote /rest, and certain spells. Leveling up (either your character or profession) will restore your life to maximum.
Note: Life earned from equipment will let you increase your overall HP but you have to remember to heal when you use +life equipment, as your beginning HP (before the equip) is of course lower than the post-equip total.