I'm reading through the book and when discussing the damage dealt by weapons, or when discussing how many wounds medical care heals it uses the wording "On a successful check, the target ... equal to the number of generated successes." Does that mean the number of successes in excess of failures, or the number of successes regardless of failures?

In excess would make medical care pretty weak, regardless would make combat incredibly lethal...

"Generated" means the number of successes that are left over after they're canceled out by failures. The idea is for those skill ranks in Medicine to really matter, since they give you a better chance to heal, and for excessive wounds to be dangerous, as they're more difficult to recover from. After all, the more damage you take, the harder it is to heal you.

I wouldn't call the combat "lethal," since it's still fairly difficult to actually kill a PC, but it is designed to be quick. If you're in combat for more than a few rounds, chances are good that you won't be able to walk away. You have to think of your resource expenditure more carefully than in, say, D&D.