Leech

"7% Life Stolen per Hit" reads as seven percent of your damage back as life. It is, in Normal, against a monster with a full drain figure. Two tables cut it after that: the difficulty's divisor and the monster's own drain effectiveness, and the second one is the reason a build that lives on leech in Act 1 dies to the skeletons of Act 2 and the bosses of Hell.

What it is taken from

Leech is a share of the physical damage that lands on the target, after its physical resistance: elemental, magic and poison damage give nothing, a physical immune gives nothing, and a miss gives nothing.

life returned = physical damage dealt × leech % ÷ 100 ÷ difficulty divisor × monster drain ÷ 100

The difficulty divisor

The monster's drain figure

Every monster in monstats.txt carries a drain percentage per difficulty, and your leech is multiplied by it. Some examples from the table:

"None" is an empty cell: the monster cannot be leeched at all in that difficulty. The skeletons, most ghosts and the later bosses are where leech builds stall; the monster pages show each one's figure.

Hell Diablo and Mephisto have no drain figure in Hell: a melee build fighting them lives on potions, Life after each Kill and replenish, not on leech, however much it carries.

Mana leech

Mana Leech follows the same two tables with ManaStealDivisor and the same drain figure, so a Hell Sorceress with mana leech on a melee weapon gets a third of a third against most of what she hits. Damage Taken Goes To Mana is not leech and is not divided.

What is not leech

Life after each Kill and Mana after each Kill are flat amounts on a kill, untouched by the divisor and the drain figure; Replenish Life is time-based. Against a player, leech comes out of the 17% of the hit that lands (Player versus Player).