If initiative reaches 0, we take the view that the character misses one rounds worth of actions, but then resumes the next round on his normal initiative.
However, this hardly ever happens, as all changes to initiative "affect your initiative for one round only", and, in practice, character rarely make more than one reaction in one round, and recoil penalties rarely exceed -2.
Personally, I can see a case for recoil penalties being cumulative if the weapon is fired continuously, and also for wounds having some affect on initiative as well, but we have never experimented with those variations.
At the other end of the scale, when initiative exceeds 12, we allow an extra minor action, useful as it can allow a second attack in one round, as well as the opportunity to move a little faster.
Egil