First of all, I've never done any form of system game involving the dice,
This is system at it's simplest form. If you have a combat heavy game, while using freeform and not setting the outcome, whoever happens to hold back the least will always win the fights, hence the small system in place. It'll be easy to get used to.
and secondly, while the concept is intriguing, I've never been much of a sub. Obviously, I don't want to make a character that never loses, because that's just silly.
This could be a little more difficult. Keep in mind that the wager is something the characters decide upon, so you could keep it to wagers you would be comfortable RPing out, though of course that also limits your options for winning.
One workaround, keep the wager generally open, but discuss limits in PM with the other player. For example, the characters could decide that the winner gets to fuck the loser with a strapon, while in PM as the players you agree that if she were to win, she should only go vaginal, which still leaves the option open to go anal if you win (vaginal/anal's always an easy example regardless of it being an issue for you, but you can probably use that concept in lots of creative ways).
The other workaround is that you roll the dice half the games, and determine the outcome for the other half beforehand. Then you would only use lighter dares on games that rely on dice.
That makes me wonder. AllieCat, will you use 1, 2, 3 for all characters? Perhaps someone could be exceptionally poor at combat and have 1-2 points less, or be a veteran and have 1-2 points more?