Am I reading the Prone condition properly?

It doesn't really limit a character, other than how far they could move with a move action? A prone character could, during their turn, move one range band (as per Movement and Positioning on pg 262) and Strike (pg 264), and stand up (because they did not perform a Movement action)?

Outside of limiting how far someone can move, and any techniques that affect prone characters differently, is there anything else that prone people need to worry about mechanically?

That's about it in this edition. In that sense it's similar to being Slowed in D&D 4E or knocked down in Blood Bowl. It's primarily there to limit additional movement through the Maneuver action, the 2 Opp Water ability to move a range band, or some techniques with the Movement tag. (The majority don't actually move you, but it is still there to limit interaction with the Water stance or provide a link for mounts and some other tags.)

Edit: Even if there aren't many techniques that take Prone as an input, each becomes a lot better if your target is actually Prone. And they're available starting at Rank 1 or 2 (depending on school), so that Earth-focused shugenja with a Tetsubo of Earth will be violent as soon as they can find victims to smash with their digging bar.

2 hours ago, NFK said:

Edit  : Even if there aren't many techniques that t  ake Prone as an input, each becomes a lot better if your target is actually Prone. And they're available starting at Rank 1 or 2 (depending on sch  ool), so that Earth-focused shugenja with a Tetsubo of Earth will be violent as soon as they can f  ind victims to smash with their digging bar.  

This. There are actually quite a few techniques that pile up extra harm on prone targets, and for all types of characters: Tetsubo of Earth for Shuggies, Rushing Avalanche Style for Kata users, and I could be wrong but I recall the Kiho Way of the Earthquake also does something nasty...

1 hour ago, Franwax said:

but I recall the Kiho Way of the Earthquake also does something nasty... 

It inflicts extra damage equal to bonus successes as well as your earth ring - nice but not devastating - but it also 'promotes' Prone to Immobilized .

Thanks all. So taking advantage of the prone condition takes coordination with teammates. I don't have a problem with that.

There are indeed quite a few ways to “combo” nicely between party members. Another one is the use of the Shuji sensational distraction in combat. Why would lower vigilance on a target be any good in a fight? Just ask your friend with Iaijutsu cut: rising blade or Spinning blades style !

Or Disorient someone with Tempest of Air to open them up to the guy with Veiled Menace style...

Some time ago...