HS works like any buff, however, whenever you are alone. HS works only at 10% of bonus EXP

A Priest casts HS for him/herself, a monster that is supposed to give 1000 EXP will now give 1100 EXP

Let's say a DK from another map, come to get HS, then go back to his/her map, he will get same type of bonus exp as priest alone, that is 10% bonus EXP

However, if DK and Priests are partied AND in the same map, let's say DK killed the 1000 EXP monster, and DK got 600 EXP and Priest got 400 EXP, while you are partied, you will get a bonus 10% (without HS), so DK would normaly get 660EXP, and Priest will get 440EXP. With HS, it will add something around 40% Exp (Cuz the party is less than 3 ppl).
So final EXP that a DK would get is
600*140%*110% = 924
and for Priest is
400*140%*110% = 616

As you see, DK almost get the same EXP if he is soloing (1000 EXP)
and Priest, can get a bit faster EXP than alone, cuz Priests kill things quite slowly.

Of course, I just made up these numbers as estimations, but that is what happening in reality..
HS works at 150% only if party is >= 3

Conclusion:
It's always better to party, not only you get 10% bonus EXP, but you always benefit from the better HS exp rate.
Correct me if anything wrong =]