http://forum.us.runesofmagic.com/showthread.php?t=79053
The healing formula is explained pretty well on that thread.
To put it simply though, Burst heals like a priest's urgent heal or the start of a druid's Recover are based on .5 of your Mdam, .3 of your wisdom, plus HPI and the amount on the tooltip. All of that multiplied by any buffs to increase received heals, and all but HPI multiplied by buffs to increase outgoing heals, and that's how much it will heal.
HoTs work pretty much the same way, except it's all of your Mdam, not just half, and that total value is divided by the number of times it ticks. The amount of the tooltip is added to that value after it's divided, not before.