You can use this system whenever you want. In my games I use it for hits on PCs and for most monsters, but if I'm pressed for prep time I only use it for monsters in the big battles.
- Get a picture of the creature in question--this can be one you drew yourself or one you printed out or photocopied. It can be any size as long as it shows all the parts of the monster that'd be accessible to an ordinary attacker. (Different pictures will produce different results but, hey, different ballparks produce different ballgames.)
- Draw lines to the different limbs or other hit locations.
- Distribute the creature's total hit points around the body in an intuitive manner. (For low level humanoids, I generally assume 1 hit point per limb, with extras going to the torso, legs, and arms in that order.)
- Creatures with more locations than hit points get extra hit points up to one h.p. per location (lucky them)
- When a creature gets hit, lay the picture flat on the table and roll a d4 on the picture. The creature gets hit wherever the corner of the d4 closest to the center of the creature points*. (The actual result on the d4 is irrelevant.)
- If the player wants to hit a certain location, he or she can try rolling the die him or herself.
- Losing all hp on a given hit location renders that limb useless until it heals at least one hit point.
- An attacker who rolls the maximum damage possible for his or her attack with a slashing weapon and causes enough damage to render a hit limb useless severs that limb.
- Depleting all the hit-points on a creature's head--presuming it has only one head--knocks the creature unconscious. Creatures wearing a helmet may be allowed a save.
- In major battles with large creatures like dragons or giants where hit location is important, if a PC's dex is higher than the monster's then the PC may be allowed to roll a number of hit-location dice equal to the difference between the PC's dex and the monster's and choose the result they like best.
- The same system, optionally, can be used for determining attacks by small, intelligent creatures like pixies on normal-sized opponents.
- You may want to give 1st-level PCs and 1HD monsters extra hit points or the maximum allowable for their class or something because this system fucks people up fast. You'll be up to your neck in limping, bandaged PCs in no time. But it's fun.
* The center of the creature--from the attacker's position--is not necessarily the center of the picture as in the flail snail example. Choose the location that is closest to the center of the attacker's crosshairs, so to speak.