Well at my school it went like this:
It was played in the gym, with one team on each side of the basketball mid-court line. You played by throwing balls (some places use rubber balls, we used smaller softball-sized foam filled balls) at one another. If you were hit then you were out and had to go to the jail in the other team's side. The jail was the oval area that freethrows are made from in basketball. The way to get out of a jail was to catch a ball in mid-air from a teammate, if it touched the floor before catching it, it wouldn't count and you stayed in jail.
If you caught an opponent's ball in mid-air and didn't drop it, then your opponent was out instead of you.
Man that game was fun...
I tell ya I did more exercise in that sort of game than whenever our PE teacher made us run around the high school track. Most of us would just run for a bit and then end up walking the rest of the way. It was stupid, boring and got us sweaty for no reason because even after we were tired from that, we had to walk all the back to the school. It's something like a block away, and when you're 4' something and just ran/walked a half mile around a track, it's ridiculous. (Literally a half mile, the track was measured to be 1/4 a mile around, and we had to walk around twice.)
"We came, we saw, we conquered, we...woke up!"