That's where I was going with it. We are essentially playing a Pathfinder game (set in Forgotten Realms) with Hero, since many of us are familiar with FR. In my case, I'm a rogue/assassin kind of guy looking to have my sneak attack damage without resorting to crazy stuff like Flame Bolt. In this case, sneak attack using hit location rules seems to make good sense.
In short, this appears to be how it works:
Example 1: Attacking with 1d6HKA dagger with a called shot to the head, with surprise
a) Stun Applied to Defenses: 1d6x5x2= 35 STUN
BODY Applied to Defenses: 1d6x2= 7 BODY
Example 2: Attacking with 2d6N dagger with a called shot to the head, with surprise
a) Stun Applied to Defenses: as normal (doubled for surprise), then doubled after applying to defenses as per hit location (28pts average)
BODY Applied to Defenses: as normal, then doubled after applying to defenses as per hit location
Combat Modifiers: -8OCV/2 (Hit location penalty adjusted for surprise), 1/2DCV Surprise
So hitting at -4 penalty to strike the head from behind, but opponent is at 1/2DCV
(at 8DCV these two modifiers wash each other out. Higher DCV is better for me.