I wanted to say that medals as perks would probably be exploitable and abusive, but then I remembered how well-balanced and rare perks are otherwise (like Bishop's Int-to-Crit strikes, learnt from the Doctor), so that seems a fine idea. If not given out to often, and with varying effects, it would mean great deeds have never been so enticing to accomplish
I can't say for the whole medals system, but I think that somewhere around the very top of it could be the Order of Avatar or something, coming with personal Avatar of War. That way, it seems, would be a quite logical and fluff-consistent approach to acquiring one, either instead of or in addition to amassing enough tokens. Have it require multiple earlier awards, exemplary career and then it would really be synonymous to 'being a great warrior'.
Medals as tokens doesn't seem too good, as we sort of already have that now, without medals, and taking it away would probably be undesired. Plus, it'd have to start at three tokens, at the very least, as I can't see much point in 'cheaper' and more numerous awards. Just keep the tokens tokens, I think, and it'll be fine.
Except if we completely rework the equipment acquisition system, of course.
@Xan I wonder whether your flesh imparted to anyone else would keep the shapeshifting properties, and whether it would try and convert other people's flesh to more of its own. Hmmm. Care to try give it a test? I am in a small need of a fleshy hand, and if everything goes smooth, you'll have a good precedent to back your enterprise. And if things go where they usually go with 'Corps... well... I can always keep the Psycho-Dissector on the draw and sever the growth before it is too late. Trust me, I've already done this with a flesh-invading alien lifeform before