DnD 3.5e House Rule: Fate Points for d20 - The End of Natural 1?

I've recently been playing in a Pathfinder game.  During this last session, nearly half of my rolls were natural 1.  As a player, this was awful.  As a player, poor rolls are just awful.  You're running along, acting the hero, then the dice turn against you.  Suddenly, you're a bad parody, slipping and tripping and throwing your weapon across the room.  From hero to jester in the roll of a die!  I've never seen rolls this bad, but it really drives the point home.

It just seems wrong.

Also recently, my friend has been discussing the Fate system with me.  Fate points are particularly intriguing, allowing a player to take control of the situation and more directly influence the narrative.  By spending a fate point the player calls upon some aspect of their character to act without rolls (or with high bonuses to rolls) to drive the story momentarily.  This is a really great concept, and one I'd like to adapt for d20.

Wait, doesn't d20 have something like this called action points?  These are similar ideas, but action points rely on further randomness.  They're also overly complicated, honestly.  They have several uses, roll some number of dice that depend on your level, and your pool doesn't regenerate in any way between leveling.  Usage is confusing, so action points go unused.

Since I don't think my gaming group would enjoy taking direct control of the narrative, I'm going to use fate points in the following ways, blending them with the use of action points:

• You may spend a fate point to gain a +10 on any d20 roll.  With this usage, you may spend multiple fate points to increase the bonus.
• You may spend a fate point to use an ability that is out of daily uses.  This includes class features (such as Rage, Bardic Music, Wild Shape, Turn Undead, Smite, etc.), feats, and spells (you may "recall" any one spell that had been prepared that day per fate point spent).

That's it - a simple usage to allow the players some control over what happens to their characters when the dice go bad, but how does this relate to natural 1?  When a player rolls a natural 1, they are awarded a fate point.  Whatever happens, at least there's some solace that their luck will even out a bit, but is it enough?

Should natural 1 be automatic failure?  Should natural 1 result in spectacular failure?  These are deeper questions that have long-reaching effects.  One of the primary responsibilities of a DM is fair and consistent ruling.  Ruling that natural 1 may not result in the occasional spectacular failure could prevent some amazing stories coming from the table.  Ruling that natural 1 always results in failure guarantees groans when the dice go south.  This is certainly a table-by-table basis, but the introduction of fate point should lessen the blow for poor rolls.

This is something I'll be trying out starting tonight, so we'll see how it goes.  I'll have to update this post once I have some evidence of how well this works out and what needs to be tweaked (such as how large should a fate pool be).

See you next week.