how do damage multipliers work?

[Huzurdaddi]

I was just in the IRC channel and we were talking about weapons with damage multiples against some types of opponents.

The question came up: how does the multiple apply?

1) only to the base damage. Thus a Hearld Lance becomes a damage 18 weapon,
2) to both the base damage and the strength,
3) to the base damage and the die roll,
4) to the base damage, the strength, and the die roll

I think #1 makes sense. But people have seen mini-SC's with weapons like this tear through stuff like nuts so they figure it is more than the base damage.

Any ideas?