It is unclear how blood memories are transmitted and recieved by immortals. Theories suggest that the DNA of human cells contains genetic memory, and that the RNA components of the virus in human cells allow for electrochemical signals to be communicated between other viral cells.
It also appears that the virus itself can retain these genetic codes upon reception, and retransmit upon stimulation. When Michael, the descendant of Corvinus was bitten by Lucian, he gained Lucian's strongest memories (Those of Lucian's love, Sonja, being burned alive by Viktor).
Transmission Between Species Edit
Transmission is not species-specific. However, it is unclear whether interspecies transmission of blood memories is entirely viable.
Marcus, a Vampire, was able to learn the memories of Singe, a Lycan. However, Marcus was a son of Alexantder Corvinus, and the ingestion of Singe's blood made him a Hybrid between both species. Ingestion between a non-corvinus Vampire and Lycan has so far not occured.
Lucian, the First Lycan, was able to transmit memories into Michael, a human, after biting him. Michael learned some of Lucians' memories. Upon Michaels subsequent bite, no blood memories are noticeably shared between Selene and Michael, or from Michael to Selene.
Selene also doesn't appear to gain Alexander Corvinus' memories at the time of her ingestion of his blood, when she becomes a Vampire-Immortal Hybrid. Also, When Viktor bites his daughter, she does not gain any of his memories. This indicates that transmission between species is most likely to be negated between already-immortal beings for the bitten, and that it requires high levels of blood and blood-based DNA/RNA to facilitate a viable reaction in the biter.
The uses for Blood Memory are somewhat comprehensive, though can be narrowed down into a few small categories of information. One use for Blood Memory would be interrogation; to gain the truth of a matter and bypass lies or attempts at concealment. Another could be life sharing; to share the experiences and memories to a partner or soul mate.
Other potential uses could involve sharing vital information when otherwise incapacitated or dying. According to Underworld: Evolution, blood memories of the dead can still be transmitted to a recipient (When Singe is killed by Viktor, his blood pools down into Markus' hibernating body. Markus subsequently learns all Singes' memories, and discovers among other things, Kraven's complete treachery).
The Chain Edit
During their reign over the Vampire Covens, the elders would sleep on a rotation (to "Leapfrog through time"). After two centuries, one would be woken (The awakening ceremony) with the blood of last ruling elder. The elders could focus their blood memories into an order, giving detailed accounts of their time in rule to the next Elder for their reign. This was known as The Chain, and Vampire law forbade this chain to be broken for any reason.
This chain lasted between Viktor, Amelia and Marcus for fifteen hundred years before it was broken, and could not be restored before the deaths of Viktor and Amelia, and the turning of Markus into a hybrid.
Elders appear particularly capable of sorting through blood memories and giving them an order after reception, and prior to transmission.