Mugen wrote an interesting blog on reincarnation Sunday. Having been a Buddhist for most of my life and having studied the philosophy of my official religion formally, I thought I'd comment. There are some very strong popular notions of what karma is and what reincarnation is. I wrote:
The Buddha himself dismissed extended speculation of past-life and future-life matters. The importance of birth as a human is that it is only as a human that one has the proper faculties and context to find liberation. Intellectual speculation about the past or the future distracts us from our path -- generally.
Over the centuries, Buddhist thought has focused on reincarnation and karma primarily from the perspective of psychology and used the realms of existence (hell, hungry-ghost, animal, human, demon/demi-god, and god realms) to metaphorically describe the nature of suffering in its three categories: the suffering of suffering, the suffering of change, and the suffering of conditioned existence.
Liberation is coming to wholly understand the nature of reality (not just intellectually but also emotionally, etc.,). Form and nothingness are one and the same -- two aspects of the interdependent and conditioned nature of all things.
Karma is not divine retribution or punishment for past bad acts. Rather, karma is the action that is produced from our perspective on the world -- through the narrowing of our senses by our emotional conditioning, mental disposition, etc.,. If you see yourself as a victim, it will only be so long before you find yourself a persecutor. How we perceive the world is intimately connected into what we experience. Karma is this. When the perspective changes, the karma changes. In southern Buddhist thought, there are three types of suffering: the suffering of suffering, the suffering of change and the suffering of conditioned existence. We suffer in part because we are living beings, because we cannot accept the transitory nature of things, and because we cannot accept the fact that our own self-identity is transitory and conditioned.
Liberation does not come from speculating on your past lives or ignoring the present to secure a good future life. Humans are the only creatures that have the adequate faculties and context to find liberation. As the Tibetans say, being born as a human being is as frequent as a blind, albino turtle emerging from the great ocean once every hundred years and happening to emerge inside a meter-wide ring floating on the surface of that great ocean. It is so unlikely that one will be reborn as a human that one ought to spend this precious time with the mind and feeling toward liberation. Of course, this also is not a call to (necessarily) lead a monastic life -- although this point is disputed by the southern Buddhists.
The terms, techniques and language of the path is different for everyone. For every disposition of person, there is a unique path to liberation -- and discovering that path is an intimate and personal quest.