The critical hits you cause in combat are more devastating. You gain a 20% bonus on the critical hit table, almost ensuring that more damage will be done. This does not affect the chance to cause a critical hit.
With this perk, a +20% bonus is applied on the Critical Hit table, ensuring more damage by critical hit and sometimes triggering an instant kill effect, that can kill the target no matter the amount of damage inflicted (the target can be killed instantly with no damage).
The perk does not affect the chance to cause a critical hit, just the damage.
Taking this perk is the only way to get over 100 when rolling for a critical hit. Allowing to instantly kill anything with a roll of 101 or more.
The instant kill effect is independent of damage. This perk makes it possible to kill something without any damage.
Some non-player characters in Fallout 2 have scripts in them that may not trigger from the "zero damage criticals" (can be read more about on Pariah's page), but can be prevented by also having the Living Anatomy perk.
Use weapons with a high critical multiplier and high critical bonus damage to maximize damage per second.
Due to the way in which the critical hits are determined, any weapon that produces multiple independent projectiles per shot (e.g. the combat shotgun, various unique scattershot laser weapons) will individually check each hit for a critical when firing outside of V.A.T.S. and do the full bonus critical damage for each success. Since criticals are automatic in sneak mode, point blank sneak attacks with one of these weapons will inflict X times the critical damage rating of the weapon, where X is the number of individual projectiles fired; for some weapons this outstrips the damage of the Fat Man.
In Fallout 3, having only 5 Luck and not the required 6 in order to obtain the perk, a character can equip the Lucky 8-ball which yields +1 to Luck. It is then possible to get the perk on the next level up, and the perk stays even if the 8-ball is removed.