In the Fudge rulebook section 1.63, it says:
"If the GM has gifts in her game, she may allow player characters to start with one or two free gifts -- more for epic campaigns. Any further gifts taken must be balanced by taking on a fault, or by trading traits."
I originally found this confusing on why you would use Gifts and Faults in the first place. Only after I began running an online campaign did I realize that a good use of the Gifts is to cover something that Attributes don't cover and some Gifts may cover many situations. It makes your character more believable. A female PC with a "Beautiful" trait could use that to help persuade, con, or just get a better response from NPCs.
Faults work the opposite way by being something in the character's background that could crop up and mess with things. If you have a PC who has Greedy in his background, he may not be able to pass up that extra loot from the museum you're robbing and set off all the alarms.
Gifts and Faults are good things to use to give your characters more full rounded look. Nobody's perfect and this is a way to show it.