I'd like a how it works on this one, if you would please! For example the "Charged Dagger" seems to be a commonly dropped item. It gives +1 electrical damage, but confers a 25% Damage Vulnerability to Electrical damage. For the sake of argument, if a wizard tosses a lightning bolt how will the engine handle what happens?

I'm assuming you save as normal, and only if hit the 25% DV comes into play? As in; fails save and is hit for 100 HP, which becomes 125 HP due to the DV?

Yes.

If it were Saving Throw Penalty: Electrical -1, then you'd be less likely to make your saving throw, but as it stands, 25% vulnerability just mean you take 25% more damage when hit.