Werewolf is the big obsession at Ruby conferences. It's kind of getting out of hand. Some people are definitely getting tired of Werewolf, but I'm still hooked on it, and to me, the interesting question is why the game is so popular. Chad Fowler and Marcel Molina are the big Werewolf evangelists in the Ruby community, so social proof and authority might have something to do with it, except it's not just Rubyists - people were "getting their wolf on" at ETech over a year and a half ago.
There's basically three explanations: it's a silly ice-breaker, it's a fad, or it means something. The first two explanations are the most likely, but the third is more interesting to think about. What could this game mean?
It could be that, since the game is entirely about human factors like eye contact, facial expressions, and body language, Werewolf provides an important counterpoint to the largely faceless nature of distributed programming. There are projects where you never work together in the same physical room, or even the same physical timezone. I've had projects where I never met my colleagues until the project was underway, projects where I didn't meet them until the project was over, and projects where I never met them in person at all. I think this isn't unusual, and lots of other programmers have had the same experience.
But we still remain human. We still have entire sections of our brains which can only process facial expressions, and which can at any time override the focus and attention of other parts of our brains. So the idea would be that Werewolf basically brings us back down to earth. However, although I think that's a good thing about the game, I don't think that really explains its appeal. The appeal of Werewolf is that it's addictive and you think you're getting better every time you play. In its aspect as self-reinforcing behavior, Werewolf is basically poker, plus rationalization, minus cards and betting.
Anyway, like many, I'm hooked. I haven't been able to find any really good resources on Werewolf strategy yet, but I did find a great short presentation with a few slides on strategy: