How do you feel about the Legend of Mana style, where every fight ends with a full heal?

I have to admit that starting with Baten Kaitos Origins I have just preferred when the characters heal after battles. I do, however, like the adventure feel you get from resting at an inn or encampment. It's a tough call and you just deal with whatever a game does use but in general in Japanese and similar RPGs I prefer when the game uses the system where health and mana/whatever secondary resource is but in Western and similar games (like Dragon's Dogma) I prefer where either the player has to go to an inn or use a resource to set up a camp of some kind. That is not to say using a resource just to rest would not be a source of aggravation but that to acquire that sense of exploration and light survival it is best if it costs something.

I think the reason for the differences would be since in JRPGs the point in the combat is often times to show off the extravagant characters and a constant reliance on artes or skills in combat it takes one out of the experience the designers are sending you down to have to run back to town and grab two dozen or so herbs/phoenix downs/elixir/panacea/mana/whatever. Bravely Default is a good example of how this can be really, really annoying. At one point I seem to recall discovering that in general it was not worth using healing magic since the money used on mana restoration items far exceeded any gain you received from not using the healing items instead. This partly broke the game as basically you cannot use a healing spell unless you at a desperate situation or boss fight.

In Western RPGs you typically the atmosphere tends to be more subdued and combat allows for more improvisation (in Witcher 2 you can dodge and roll, in Dragon Age you can pause and issue commands to each one of your people, in Fallout NV you use guns and VATS, etc.) that does not necessarily cost as dearly as in JRPGs. Therefore, the act of resting seems to feel more authentic in these games.

Are non-HP resources healed as well?

Worth noting that Legend of Mana is a Kawazu directed game, and therefore in some ways it may be more like SaGa than Mana. In particular, I believe the full heal after every fight originated with Romancing SaGa 2, where HP recovers fully after every fight, while LP (which decreases when HP reaches 0) is extremely difficult to restore.

SaGa Frontier adds a mechanic where, if a character is not in the party that fights an encounter, that character will recover a bit of WP, JP, and LP; I like this mechanic because it encourages the use of more characters, allowing some characters to rest while others fight.

Then there's JRPGs where MP recovering abilities exist that don't require the use of items.

My favorite example of this is Final Fantasy 5:
* There's a spell that restores a character's HP and MP fully, but has the downside of killing the caster. The spell is only usable during combat.
* There's a revive spell you get early, but it costs 29 MP, which is a lot at this point in the game.
* Much later in the game, there's a spell that revives a character with full HP and MP, but costs 99 MP and won't work on a character who isn't already dead. There's also an ability you can get that revives all dead characters, restoring full MP (but not HP) at the same time.
* MP recovery via items is possible, but without Chemist abilities, one Ether restore only 40 MP, which just isn't enough later on. With Chemist abilities, however, this becomes a rather effective MP restoring option.

The WRPG style is also annoying some times, particularly when the game doesn't allow resting for what feels like arbitrary reasons.

In TES: Arena, for example:
* Situations where the game thinks there's enemies nearby and doesn't let you rest occur way too frequently.
* The game doesn't let you rest in towns, even when it allows resting in the wilderness or in dungeons. This is especially problematic if you arrive in town in the middle of the night, especially if you're just leaving the starter dungeon for the first time.

In Daggerfall, if you select the option to rest "for a while", outside of towns you're asked how long you want to rest and can cancel. If you do it in a town, however, you get a message about it being "illegal to rest", and the guards will come after you, even before you specify an amount of time to rest. (Note that even trying to rest on the balcony of a house you own will cause this to happen.)

Pretty realistic representation of anti-homelessness if I do say so myself.

Well, there aren't any other resources to speak of.

I might be interested.

Make a game require the same requirements any real person would need and have the game evolve based upon that logical path. Also make the game NPCs and creatures require the same needs.

The game shapes itself at that point and the game would progress accordingly instead of the way the writer would fudge most of these mechanics.

Some argue that the game is tedious and annoying. Well not really, since every player would already understand how the game works. Plus the requirements would provide logical timing to events. Everything in the game works similar to reality and the developer can use this to not force awkward design and events into the game. But to take a moment and understand everything requiring food, water and sleep. Would make every being in the game have a proper motivation. Not just spawn in the millions to overwhelm the player which for some silly reason seems to be the center of the universe.

The feel of a game when you play is important. Cyberpunk made mistakes in adding to much graphical importance, while leaving out much of the game play for example. Development teams seem to over focus on graphics. But time and again when games like UnrealWorld and Cataclysm DDA come into the mix, we see these games not care much about graphics as the gameplay is more important. Also, Dwarf Fortress. They after years of development and care, only now implement a standard graphics pack. The game came first and thats how it should be.

I'd play Cyberpunk if it looked like Elder Scrolls Arena for all it matters, as long as you could go down a million rabbit holes and make your own story along side the main course. I and many others wouldn't care.

The question isn't how it should be handled, it's if it should be there at all.

So let's back up; What did resting at the inn really do for you? With the D&D Eye of the beholder (classics game) Healing and restoring your slots was a pain, though renting a spot at the inn gave you 2-3 squares but you could rest and heal repeatedly in your party until you were healed.

In many Final Fantasy games and others, healing can be done by magic again, but restoring MP with expensive ether potions just wasn't efficient. So ultimately resting at the inn was to restore your MP cheaply with the caveat of not being in a dungeon or battle. Final Fantasy games also let you buy tents or similar so you could rest at designated spots that were semi-safe zones.

Other times resting wasn't so you had to restore HP/MP, but to progress to the next plot point in the game, as a 'i'm done dinking around, let's resume the main quest' thing.

Other games like Diablo 1&2 will have someone you can talk to and instantly restore all your HP/MP in an instant, which is the same as the bed (at least in function). Final Fantasy X you touched the save point and it would restore you instantly. (FF-13 took a different approach, namely you were always healed/ready for the next fight).

As mentioned before, Morrowind/Oblivion used sleeping as a method mostly to level up (just 1 hour being enough to be fully rested and magically more HP/MP/Carry Capacity), otherwise it's a cosmetic thing with no real effect.

So while a bed/inn is convenient and a workaround for some things, i don't really think it's needed overall.

I enjoy the balance between a limited but free or almost free inn and more convenient but expensive potions and spells that can be used anywhere or even during combat. But it depends on how the gameplay loop is designed.

You can also take into account difficulty levels. In The Witcher 3, meditation (=rest) restores hit points only if you're playing in easy or medium difficulty.

I think rest alone shouldn't be enough to heal wounds.
I'm all for recharging mental energy for spellcasters or stamina, but what hits health directly should be addressed by medics or the setting's equivalent (like Clerics and miracles).
In practice, this should make "brief" rests useful to have skills ready without too much hassle, but "long" rests required to proper recover from injuries. This way you don't feel arbitrary limited but neither you can abuse the system by just spamming rests and taking no risks.

In many classical RPGs (including Wizardry 1-5 (but not 4), Bard's Tale 1 and 2 (but not 3), and even early Dragon Quest and Final Fantasy titles), the basic gameplay loop could be described as follows:
1. Prepare for the expedition in town, buying any new supplies you might need (like new equipment, spells (if they're bought in the game), and consumables).
2. Leave town, explore the wilderness/dungeon, killing enemies for XP and loot. Continue until running low either on resources (like MP) or inventory space.
3. Return to town to rest, recover HP/MP, sell excess loot, and possibly (depending on the game) level up.
4. Repeat from step 1.

So, essentially, the inn serves as a place to rest between expeditions, so that you start each new expedition with full HP/MP, and you return there when you're done exploring for the day.

Later RPGs tend to be balanced around clearing dungeons in one trip, or they mess up this structure by letting you rest anywhere or automatically refilling resources.

In a game where magic can restore health, and magic can be restored easily by resting, health should be restored easily by resting; otherwise that's extra busywork for the player.

Only Oblivion is like that.

In Morrowind, resting isas handled the way it was in Arena and Daggerfall; to restore Magicka from 0 to 1x the character's Intelligence, 8 hours of resting are needed IIRC (or maybe it's 4?), and Magicka does not regenerate on its own; this is very similar to the situation in Arena/Daggerfall. (Worth noting that, Arena and Daggerfall also have a rule that Sorcerers (or, in Daggerfall, custom classes with a certain disadvantage that the Sorcerer has) do not regain Magicka with rest (but can still regain it via potion or spell absorption); Morrowind still has this rule, but it's now tied to the Atronach birthsign instead of to class. In Oblivion, the Atronach birthsign prevents Magicka regeneration, and is interestingly present on vampire sorcerers.)

Incidentally, in Morrowind resting (and waiting, if the game disallows resting for being in a town) is near instantaneous; why they went back to making it take real time in Oblivion I have no idea.

Also, in Morrowind to you rest everywhere except in town (again, why have that exception?); Oblivion requires a bed, but resting is only needed to level up or to progress certain quests.

As somebody else already mentioned in this thread: people normally do and didn't like homeless people sleeping in the streets, especially if those are seen as foreigners (which could already be the case, if you are not from the same town/area).

If you include a resting system not just to refill health/mana as a resource (like most games do), but to also as some kind of simulation, to make the world feel more like a world I think this exception -athough somewhat annoying- does have a part in it.

For me it is as follows:
* playing a JRPG, which I mostly do for the story and not for "living" in the gameworld: I do prefer the one night->completely healed way as most JRPGs have implemented it already.
* playing a western rpg, that tries to simulate living in a world (being it an open world like in the elder scrolls or more traditional like Realms of Arcania) I do actually like the annoyance that longer healing times/not being allowed to sleep in town brings to me, as does having to take care of my rations. (As said previously the exception are stupid gameplay/balance related decissions like having to wait between rests or limiting resting to certain areas although it would be absolute plausible to be able to rest in other areas)
* dungeon crawlers: although not necessery realistic, just let my party rest instead of having to wait to heal.
* What I said for dungeon crawlers is generally a stupid idea: Do by all means not make waiting and starring at a wall be an essential part of your game design.

You're right, that would only be logical.
Maybe the system could separate health in two parts: the classic hit points, and wounds. Hit points regenerate with rest, but wounds remain; a wound should be inflicted, say, on crits or after hitpoints go under a certain treshold and they should give permanent handicaps until cured, like decreasing dodge, max hp/mp/stamina... also, they should be cured with non-immediate means. If you just bang a restoration spell we're back at the beginning. That, or making some divine spells more costly. PnP Pathfinder, for example adds materials and conditions to resurrections and restorations, to compensate for their huge power.