All,
  Here is the basic outline of my mechanics (sorry it is so long):

  There are six possible outcomes that can happen when a player declares their character's actions:
1) Free narration - In other words, it happens as they describe it. This is the case for most actions. There is just no reason to believe that the character can't perform the action and no one is there to stop them.
2) Pure intentions - It happens as the player describes it, and their Purity track is moved one towards Purity.
3) Corrupted intentions - It happens as the player describes it, but their purity track is moved one away from Purity.
4) Leverage - The player can trade progress towards their goal for personal gain. Usually this is required if the action is selfish, but not particularly impure.
5) Advancement - If the character's action entails self sacrifice and advances their goal, move them one closer to their Goal.
6) Conflict - Someone opposes their actions. The rules for Conflict are used to see who gets what they want.
a) Players decide which characters are in the conflict
b) Players declare their characters intentions.
c) Mastermind sets the Intention Target Number for each character based on his OR and the context of the intentions.
d) Mastermind declares intentions for the antagonists (henchmen do not get to declare intentions) and set Intention Target Numbers.
e) Mastermind declares action type for antagonists.
f) Players declare action type for their characters. Action types consist of:
1. Action - Use a talent. select a Talent and get a bonus die.
2. Overpower - Activate a power, invoke a Ritual or activate a Gadget. Follow the Rules for that Power, Ritual or Gadget.
3. Exploit - Activate a weakness.
4. Pure act - Add your Purity to any one die before dice are assigned. Lower Purity by one.
5. Corrupt act - Add your Corruption to any one die before dice are assigned. Lower Corruption by one.
6. Selfish act - Add your Drawback to any one die before dice are assigned. Lower Drawback by one.
7. Inspired act - Add your Goal to any one die before dice are assigned. Lower Goal by one.
8. Feint - +2 to the Cunning Die, -1 to Ambition Die.
9. Brutal - +2 to Cunning Die, -1 to Vigilance Die.
10. Guard - +2 to Vigilante Die, -1 to Cunning Die.
11. Protect - +2 to Vigilance Die, -1 to Ambition Die.
12. Anticipate - +2 to Ambition Die, -1 to Cunning Die.
13. React - +2 to Ambition Die, -1 to Vigilance Die.
14. Defend - Select another character. When they take Abuse, they do not take Abuse, your character does. -1 Ambition Die, -1 Cunning Die.
15. Ambush - Player can change their Intention. they get a new Intention Target Number and keep their current Progress. they cannot accumulate Progress or cause Abuse to others this turn. They can still take Abuse though. -2 to Vigilance Die.
g) Calculate bonus and penalty dice.
h) Throw the dice! According to the rules of the bonus and penalty dice, choose which three to keep.
i) The Mastermind assigns dice to Ambition, Cunning and Vigilance.
j) The rest of the players assign dice to Ambition, Cunning and Vigilance.
k) The Mastermind assigns bonuses and penalties.
l) Players assign bonuses and penalties for their characters.
m) For each pair of players opposing each other, compare the following values:
i. Ambition Pool + Ambition Die vs. Ambition Pool + Ambition Die. Whichever player has the highest total, gains Progress equal to the difference.
ii. Cunning Pool + Cunning Die vs. Vigilance Pool + Vigilance Die. If your Cunning total is higher than their Vigilance total, they take Abuse equal to the difference.
iii. Vigilance Pool + Vigilance Die vs. Cunning Pool + Cunning Die. If your Vigilance total is higher than their Cunning total, you escape harm.
n) If your Progress total is equal to or higher than your Intention Target Number, you achieve your Intentions.
o) If your Abuse total is higher than your Obstacle Rating, your character is taken out of the conflict and your oppositiion gets their Intention.
p) The Mastermind narrates the action for the scene so far.
q) If no one has sufficient Progress to accomplish their Intentions and no one has taken enough Abuse to take them out of the conflict, jump back to step "e" and continue until at least one character is able to achieve their Intentions through Ambition or Cunning.
r) For everyone that has Progress greater than their opponent's OR, they get their intentions from the scene. If more than one character gets their intentions, players can take turns narrating one Fact for every 2 points of Progress. A Fact is one sentence with no more than one verb and two nouns. Facts cannot be used to cancel or negate any previously established Facts. The Player with he highest Progress goes first. Characters go before Antagonists.
s) Every character with Abuse takes some sort of harm or setback during the scene. Those with Abuse equal or greater than half of their OR should receive a penalty die on their next roll. Those with Abuse greater than their OR should take penalty dice on every roll in their next scene.

  Do you see any obvious flaws in this system?

Does Mastermind = GM? Is s/he also the person doing the judging of 2, 3, 4 and 5 (and their analogues in 6f)?

Where does the Progress number come from?

Mike,
  Thanks for replying.
  OK, to answer the big questions:
Does Mastermind = GM?
Yes, Mastermind=GM.

Notes on Chargen:
How do you create your characters?
- Make sure that Ambition, Cunning and Vigilance add up to 9 and make sure that none of them exceed 6.
- Pick 4 Talents.
- Calculate your character's Obstacle Rating (OR) it is (Ambition + 2 x Cunning + Vigilance + Lowest Pool).
- Select a Goal and a Drawback. A Goal should be both Epic and Achievable (e.g., My super scientist will find a cure for cancer). Drawback should be the character flaw that makes that hard to do (e.g., All my super scientist cares about is money)
- Set your Purity to between +3 Purity and +3 Corruption.
- Name them and pick a Clan.

Is s/he also the person doing the judging of 2, 3, 4 and 5 (and their analogues in 6f)?
  Yes, the GM decides, with these guidelines:
  Six ways to resolve narration, which one is right for you?
1) Free narration - Try to really rely on this. If crossing a gorge gets the players into conflict with someone else faster, don't waste time trying to figure out the odds of the characters succeeding at crossing the gorge.
2) Purity - This is really just free narration with a twist. If a character's actions are pure, reward them.
3) Corruption - If players are taking the dark path, mark their progress on the Purity track.
4) Personal gain - The guiding star for this option should be the character's drawback. Any time the drawback is part of a scene, you should be ready to push the character farther from their goal.
5) Advancement - These moments are usually pretty obvious, be sure to reward them mechanically.
6) Conflict - Try not to overuse this. You want to limit this to times where someone has the ability to resist the characters and a good reason to exert the effort.

Where does the Progress number come from?
  6-m-i (I won't use this numbering scheme in the final version. It's just in outline form until I get the mechanics worked out and then write it in human-friendly language).

  Also, Ambition, Cunning and Vigilance are your stats, the Pools are static numbers that get added to the dice after hey are rolled and assigned. Talents are like skills that give you bonus dice when you use them (you get to roll 4 dice instead of 3, but you still only keep 3). Abuse is the harm you take from the conflict. After you assign the effect (penalty dice), it goes back to 0 before the next scene or conflict. Mastermind is the GM.

  Does that clear it up any?

where exactly does the steampunk come into all this?

777,
What is this game about?
  The world of Steampunk Crescendo takes place in an alternate earth. This game is about oppression. Every element of the setting is designed to keep the characters in their place. This game is about power and the will to use it. Ultimately, this game is about change. The world of SPC is changing. How will the characters adapt to that change and how will the characters affect the direction of that change?

What is steampunk?
  Steampunk means many different things to many different people. In Steampunk Crescendo, steampunk means the point in time and space where the industrial revolution, the Victorian era and fantasy collide. It is the ultimate dystopia where oppression, magic, super science, industry, Rom and vampires combine to make a world of challenges for the players to overcome.

What is dystopian?
  Everything is happening bigger and faster than it ever could before. The world is changing. The people of the world are adapting to this change in different ways. Many individuals and organizations have seized this opportunity to advance themselves and their interests ahead of those of their fellow man. Rail barons, oil barons and other robber barons have created the engine of big business. The massive government effort required to build a modern infrastructure (railways, telegraph, etc.) and the ease of communication has given birth to big government. In these times of uncertainty, big, global churches are evangelizing, spreading and trying to guide people through the unknown. And the Industrial revolution has given birth to the Military-Industrial Complex. In fact, every authority across the world has gotten bigger. Even crime bosses are running mafias instead of gangs...

What is the industrial revolution?
  Production, commerce and consumption are occurring at scales previously unimaginable. The advent of the steam engine and the factory are allowing the construction and distribution of goods that were previously impossible. What this means to most people in this era is two things: first, they may have to learn a new profession if their old profession becomes obsolete, second, those that take advantage of this change will gain in wealth, power and influence.

What is Victorian?
  The Victorian era is an era of myths and legends to you and me. But the time itself is marked by very particular trends:
1) "Appearances" all aspects of Victorian culture are driven by what things look like to an observer. Fashions were rigorously puritanical and any organization or individual was measured by their observance of rules and their contribution to society.
2) "Imperialism" many nations took part in the phenomenon of colonizing the new world. Of course, the new world was already populated. And this, in turn, led to a previously unprecedented level of conflict around the world.
3) "Culture" many nations and groups distinguished themselves from others by their level of civility. And in their minds, civilization. This can be seen in colonial Africa, colonial South America and on the frontier of the United States. Where "primitive" people were marginalized because they were not "civilized."
4) "Enlightenment" successful people were obliged to provide for the less fortunate. We can see this today by the number of hospitals and universities founded during this time.

What is magic?
  In the world of SPC, magic is a force of nature (like gravity). Sorcerers can change the very laws of physics with magic (if only temporarily). Magic and science exist hand in hand. In fact, some scientists have used magic to discover more about the physical sciences.

What is superscience?
  The borders of human knowledge are expanding rapidly in this era. Some of the names that we consider common science terms (e.g., volt, watt, hertz, etc.) are, in fact, the names of science pioneers from this era. In Steampunk Crescendo, science is turned up to 11. The wildest fantasies of Tesla and Da Vinci are easily possible in this fantasy millieu.

What are vampires?
  Steampunk Crescendo brings another twist to vampires. Vampires exist. They have awesome powers. The have debilitating weaknesses. But they are not the undead. Instead, they are Rom that have fallen to temptation. That vice manifests as vampiric powers and vampiric weaknesses. They all have different powers, they all have different weaknesses, they all have different tell-tale signs, the only common thread is, they all feed on human blood.

  And that's who your character is, a human with a Vampiric curse.