[shatner]

The sick head means diseased. Also, one of the two hearts that unit has is the affliction "Diseased" (yes, that's redundant but diseased is an important enough affliction to get both a heart and a sick head icon). The other heart is... something else (limp, crippled, whatever). All afflictions are permanent and, other than diseased, none of them have accumulating effects (i.e. battle fright will always give a -5 moral and that penalty will never increase further).

As stated before, all afflictions are permanent until healed and healing is generally kinda rare. Forms of healing are:
1) the recuperation ability, which will constantly attempt to heal afflictions for that unit only
2) being immortal, acts the same as recuperation though it might not be as effective... not sure on that one
3) being in the same province as one or more friendly healers who are taking the "Heal" action. Note that you cannot heal afflictions on old units this way.
4) Being in the same province as a unit holding The Chalice
5) Being in friendly dominion while the spell Gift of Health is in effect
6) Any time you involuntarily change shape (like changing from a jaguar warrior into a werejaguar and again when changing back into a jaguar warrior after the battle is over) have a chance of healing afflictions. Voluntary shapechanging (like changing a dragon pretender into human form and back) won't heal afflictions