I am new here, so I thought I'd throw in my two cents.
Hemalurgy was an interesting subject to me the second I saw the word in Brandon's annotations. I immediately started to formulate as many ideas as I could on the subject. Below is my best theory on what it is and how it works.
We know that all hemalurgists have metal in some way piercing their bodies. This metal seems to be directly related to their ability to use hemalurgy. So, I would like to start by mentioning the Inquisitors. Their hemalurgical powers are a result of their spikes, and they may very well be their only powers. I have never bought that inquisitors suddenly became full mistborn, as there doesn't seem to be too much of that metal Elend got. This quote from MB1 annotations about did it for me.
Marsh's plan to kill the Lord Ruler is a good one too. Unfortunately, the Lord Ruler's power doesn't come only from Hemalurgy, but from other things as well. If he'd pulled off the bracelets instead. . . .
Emphasis Mine.
This refers to Marsh's trying to kill the Lord Ruler by pulling out his lynch pin spike. The only problem is that the Lord Ruler doesn't have a spike. However, Brandon doesn't say this as, "The Lord Ruler doesn't have a spike to kill him with." No, instead, it is that "the Lord Ruler's power doesn't only from hemalurgy," and the instant implication there for me was, "As the Inquisitors' power does." This is by no means verified or supported, but that was the implication that I caught. This led me to assume that the Inquisitors die when their lynch pin spike is pulled as a direct result of their only ability being hemalurgy, which keeps them alive. More on this later.
Anyway, the Inquisitors. They are created through hemalurgy, as supported by the MB1 annotations, Chapter 38 part 2.
Making Inquisitors via Hemalurgy requires killing other people (see book three for an explanation of the process) so there's a lot of mess involved.
Emphasis mine. Anyway, we see more about the actual process of creating an Inquisitor in MB2, Chapter 12. This is where Sazed and Marsh have just entered the Convectical of Seran, and Sazed is looking around. He stumbles upon a particular room and says:
There is....something different here in this last room, at the back of the main landing. I'm not certain what to make of it. A torture chamber, perhaps? there are tables - metal tables - set into the floor. they are bloody, though there are no corpses. Blood flakes and powders at my feet - a lot of men have died in this room, I think. There don't appear to be torture implements beyond...
Spikes. like the ones in inquisitor eyes. Massive, heavy things - like the spikes one might pound into the ground with a very large mallet. Some are tipped with blood, though I don't think I'll handle those. These other ones...yes, they look indistinguishable from the ones in Marsh's eyes. Yet, some are of different metals.
Once again, emphasis mine. Anyway, I wanted to point out here that the spikes are already tipped in blood, and that some of the spikes are made of different metals, though we do not know for sure how many or which ones. So, with no further ado, on to the full body of the theory!
Hemalurgy is fueled by the body's own blood. Specifically, by the metals in one's blood. Each metal provides a hemalurgical power that is somewhat related to those produced by allomancy and feruchemy, but not exactly the same. For instance, in feruchemy, gold stores health. A hemalurgist is able to "burn" blood with high gold levels in it in order to heal quickly. Thus, the inquisitors incredible healing powers. This also explains why the inquisitors need to rest often, as well as why they never "go blind." If blood were your source of power, you would've needed to rest long before you ever became unable to see.
But how does the metal get into the blood? The spikes do it. Each spike is placed somewhere near where blood is produced, causing the blood to naturally pick up metal from the spike. The more metal in the blood, the more powerful your hemalurgy is, but also the more powerful Ruin's influence on you. This is why Inquisitors seem to be so strong in Allomancy, as well as the reason they are almost completely under Ruin's control now (or at least, that's what I assumed). In this way, you could also control how much of each metal you got. If you placed a steel spike somewhere where more blood is produced, then you would have more "steel blood."
Now, I mentioned earlier that I thought the Inquisitor's only power was hemalurgy. Some, like Marsh, would have been mistings, but I don't think that this is a requirement. It's just a nice addition to hemalurgy. It could be that all inquisitors are Seekers, and that bronze in hemalurgy pierces copperclouds, allowing a seeker to find an allomancer. I think that it is more likely, however, that inquisitors can only pierce copperclouds at close ranges due to their relatively large amount of power from hemalurgy. Otherwise, every non-noble allomancer in the city would have been caught in a matter of days.
But I'm getting a bit off track. The idea that an Inquisitor's power is hemalurgy only, and not allomancy, came to me while I was reading. I noticed how often it was mentioned that the Inquisitors were powerful allomancers, and i thought, "what if they don't actually use allomancy? Wouldn't that be SO cool! (Not to mention a great way to mislead us fans...)" So I started thinking it through. In order for this to work, hemalurgical powers would have to be fairly similar to allomancy. For instance, Inquisitors would have to be able to push and pull metals. They would also have to either be naturally very strong, or increase their strength through magic. But some of the metals would be relatively useless. For instance, malatium would be completely useless to an inquisitor (they wouldn't need to see other's pasts). So I decided an inquisitor would need Steel, Iron, Bronze, Zinc, Brass, Gold, Atium, and pewter. They would do the following for them when present in their blood in a relatively high concentration:
Steel: Allows an Inquisitor to push on metal sources nearby. Because Inquisitors can see metal inside other's bodies, I decided they would need a relatively high steel concentration in their blood (I relate power directly to concentration of metal in the blood), and thus assigned them two spikes made of steel.
Iron: Allows them to pull on nearby sources of metal. They would have two spikes for iron as well, for the same reasons as steel.
Bronze: Allows them to sense allomancy, piercing copperclouds at close range. (NOTE: Inquisitors do not need copper if they are not using allomancy. Plus, it wouldn't matter as everyone just assumes that inquisitors can use allomancy)
Zinc: Going with either feruchemial or allomantic power, it either lets them Riot emotions or lets them speed their own minds up. Possibly both. I haven't really decided yet.
Brass: Soothes emotions. I don't think inquisitors need to be able to burn brass to keep themselves warm (brass feruchemial property)
Gold: This one I chose for its feruchemial property, storing health. I thought that if an inquisitor were to burn "gold blood," then they could heal themselves relatively quickly. This could also be how they keep themselves alive, constantly burning gold at low levels. I assigned them two spikes of gold for this reason.
Atium: I honestly don't know what it would do for them, but we know that they can produce a similar effect from when Kelsier and Vin infiltrate Kredik Shaw in book one.
Pewter: Kelsier describes the Inquisitor he fights as being inhumanly strong. Also used to describe allomancers burning pewter.
That's 8 metals, 3 with 2 spikes, or 11 spikes total. Inquisitors wouldn't need aluminum (that would kind of defeat the purpose) or duralumin. They can already burn large bursts of blood at a time.
In MB2, Zane states that when he cuts himself, God's voice is easier to ignore. This is because at that point, the amount of metal in his body drops as he loses blood with metal in it, and Ruin cannot influence him as much.
I think that that's pretty much it. I may have forgotten something, but please tear it apart. I love a good discussion. As always, evidence for or against from the books is appreciated.
EDIT: I forgot to mention that I think that the blood sacrifice is what allows someone to use a piece of metal for hemalurgy in the first place. I guess that would be somewhat important to mention....
2nd edit: I just did a word count....1500. Not bad for a first post....