Life bar not showing damage
 

I've tried rebuilding DB several times, using different world files, still same thing.
The damage being done to char doesn't register on pc that is being damaged, but from other pc I can target that player and see the damage, and the same going the other way,he can't see his damage but i can.
I'm running 0.3.1.1 on 1.2 Athalon , win2k pro.
other macine is P-III 450 , winME.

I haven't encountered that bug. However occasionally I've found when fighting monsters that the server would not display my hits on it. It would be damaged, and die eventually but its life bar would not go down and there would be no "you hit X for X damage" message. However the server would show a message and decrease the life bar when it hit me. And if you turn/run away from the monster, the messages start displaying again properly.
This sounds like it's almost certainly related to your problem, though it is the other way round! Seems like a server/client communication problem.

Aye, this is a big bug...
 

Once the health of a person gets down to a certain point the Health Bar that other players see makes it look as though your health has gone up when it hasnt....its a display bug