A bit more on Storytime

For my current Deadlands game, we've been starting each session with "Story Time". I also used the technique for a Vampire LARP (named Hearts of Darkness, often just called HOD), I ran several years back, and IIRC, the idea of Storytime came from then-Co-GM Dave Hearn.

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Vampire:
At the LARP, we had 50 players, and needed a way to convey plot-points more reliably than the grapevine of PCs telling each other what had happened "off camera". So, when a scene was really important, we'd recreate it (or a trimmed-down version of it) for the whole group at the start of the next session. We also used pre-game scenes to foreshadow events, play out the arrival of NPCs, tell backstory and spread rumors. It was a lot of fun, and a very useful tool for our bag of tricks.

We opened Storytime up to players as well, saying anyone who requested it could have 2 minutes of stage and spotlight at the start of any session. We'd usually get about 15 to 40 minutes of material between the GM-prepped stories and the player-performed ones. The stories were for the players, not for their characters - you could use the information gained, but really shouldn't directly reference it in-game.

This being a LARP, sometimes the story-times would end up with some serious production qualities and some real suprises. I remember one time someone told a tale about how their character disposed of a body (torpored vampire, actually), and they brought a bloody (painted, actually) mannequin, complete with stake (painted styrofoam, actually) through the heart. In retrospect, that was awesome, but at the time I nearly wigged out over it, since we were playing in public (college campus) and it looked convincing from a distance.
Then there was this other time when someone else thought it'd be fun to try to do a magic ritual, complete with blood and candle, before the group. I did wig-out that time, and put the player on notice. Never let him do another storytime after that, nearly kicked him out of the game over it.

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Deadlands:
What I'm doing in the Deadlands game is on a much smaller scale, since there's just 5 players. At the start of each session, I tell one story related to the plot. If players care to tell one, they can do so, and will even get a Bennie (it's like the Tokens in F#) for doing so. My stories are clue-laden, and reveal things relevant to the plot. The players mostly use theirs to develop their characters more. The tales are considered told around the campfire as they travel - they are encouraged and expected to use the information in-character. I wrote a bit more about it a month ago, if you're interested.