The Survival skill increases the Hit Points you receive from food and drink. It also helps you created consumable items at campfires.

The usefulness of this skill depends wholly on one thing; are you playing in Hardcore mode? If so, you might want this skill, as it will increase the usefulness of consumables and allow you to create better, more wholesome consumables at campfires. If you don’t play on Hardcore mode, you don’t need to eat or drink anyhow and might as well just use a Stimpak to heal. Seriously, 15 points of Survival makes Purified Water restore 15 more H20, so 100 points of Survival… well, it makes you need half as much food and water, which is a good thing indeed. If you’re playing in Hardcore you absolutely must get this skill up to 50 as soon as possible so that you can prepare Bighorner Steaks, which should take care of all your food… err… FOD needs.