There are two kinds of resting: Rest and Recovery. Both require a safe place without immediate danger. Think of Recovery as halftime during a sporting event while Resting is the shower, meal, and bed afterwards.
During Rest: All Hit Points (HP) and Element Pool (EP) regained, up to three injuries may be treated by each character with the Treat Injury skill, and some simple items can be crafted. All Fatigue effects from exertion and not ongoing ailments are removed.
During Recovery: All HP regained and a single injury may be treated by each character with the Treat Injury skill. All characters regain an amount of EP equal to their Dominant Element modifier. Fatigue effects caused by exertion are reduced by 1 (e.g. Fatigue II becomes Fatigue I).
Lugging gear around is hard work. Each character has a carrying capacity of 50 + (10 x Earth modifier). This includes the weight of all carried and equipped gear. A character above their carry capacity is Immobilized.