*remembers the "Duct Tape on Trigger" problem with the Hades in ST*
Personally, I prefer the way they implemented it in Bridge Commander. The engine calculates a "damage sphere" on the model, and the larger the sphere the greater the damage is. And the more damage applied to a zone containing damage sphere, the larger it becomes, the more weathered the hull looks, etc. The problem is that when a ship's been covered in them (even glancing hits that don't do enough to leave a mark) framerates tend to drop real quick. So a damage threshhold would have to be implemented: a certain amount of damage must be applied in a certain span of time (i.e. 500 points in 3 seconds) before a damage sphere is placed.
It technically isn't "geo-modding", but if you, say, applied enough damage spheres to take an arm off a Sathanas, the arm would drift off like any other chunk of debris. In Bridge Commander there are three critical subsystems: Bridge, Warp Core, Hull. If any one hits zero, the ship is destroyed. So for FS, a Command Deck, Power Core, Hull setup would be the equivalent. And as long as the three components are together on the same chunk of starship, the thing is still functional. Naturally, if anything gets separated from these three, it becomes destroyed and behaves like said Sathanas arm.
This allows for a nice damage effect, but most importantly
modelers won't have to make the damage LODs anymore because the ships in dying could have multiple large damage spheres randomly applied to core sections that would break the ship apart and leave it burned to a cinder. Then we tell the engine to save the coordinates of the blasted sections and burn marks, remove the damage spheres, and (hopefully) avoid the framerate penalty BC suffers when you're in a ships graveyard.
Alright, I'm done. Feel free to flame me for this.