I’m not totally clear on how I’d use it outside of FoRKs and DoW. Am I meant to be able to use it like a wise, to state or learn what the real ugly truth of the situation is? Or is it meant to serve as a more specific form of Persuasion, to get others to face the truth and stop hiding their heads in the sand?
Does anyone have a good example of a time they used it in a game?
What I love about BW is that there are about as many social skills as there are weapon skills. And why is that so? Because different people use different methods to get people to do what they want them to do.
A thug will use Intimidation to keep his gang in line.
A con artist will use Falsehood to convince everyone his lie is true.
A general will use Command to have his soldiers follow his orders.
A dwarf will use Stentorious Debate to talk over their opponents until the other just gives up.
A politician will Persuade his fellows to go along with his plans.
A merchant will Haggle to keep his prices high.
A scholar will use Rhetoric to beat down his students.
A cleric will use Suasion to guide his flock.
AND an asshole will use Ugly Truth to banish any delusions his target may have about the situation.
“Listen, jerk!” says the PC with Ugly Truth. “You’re a middling politician who’s life amounts to crap. You’ve made a horrible deal with the worst villain this world has seen and when his goal is achieved, you’re the first to die. You’ve got no wife, no children, no future. Just leave now and forget the whole thing.” The politician realizes what a mess he’s in, slumps his shoulders, and leaves.
It’s beautiful color that should affect how the world perceives the character. It leads to wonderful traits, too!
Gosh. I need to get Spyderswebbing in here so he can tell you about Tomar the Lion. I feel like he’s trying to get grey-shade Ugly Truth. 
Kublai is right on. Ugly Truth is cutting the nice and flat-out cutting someone down to size. Works great for miscellaneous social stuff.
The best use of Ugly Truth came down to two words in our old campaign - “You’re fucked.”
Ugly Truth is most definitely a social skill and not a wise. It is frequently used in Obfuscates and Dismisses in the Duel of Wits. Use it to say something shocking and true – speaking truth to power, declaring the emperor has no clothes, brazenly admitting responsibility for something terrible…
In a recent game, we’re playing lieutenants in one of many thieves’ guilds in a fantasy city. My character is a necromancer (summoning with the restless dead and sanctified dead orders). A group of assassins recently tried to cut us down in a teahouse. We managed to turn the tables and actually capture one of our assailants. We do an interrogation duel of wits (using the patrol method) to determine who sent the assassins and why. When my turn comes up, it’s a Dismiss (which plays to my strengths, as Ugly Truth was my only social skill at that point).
My character stares at the assassin quietly for an uncomfortable period of time. “You will tell us what we want to know, for your sake. I find violence distasteful, but if you don’t tell us everything now, you will die and then I will enslave your spirit to serve my every whim until the end of my days. And then you will tell me everything you know, holding nothing back. Either way, I will get what I want. What do you say? Will you talk?”
At which point my character began fingering one of the many human finger bones woven into his hair as Mark traits from other restless dead who serve him.
A while later, we’d found out who sent the assassin. Turns out we’d pulled a previous job (a kidnapping) in a rival boss’s territory against someone who was paying her protection. We managed to pull some strings to get a meet on neutral turf to smooth things out. I get an Obfuscate.
“We understand madame. A crew of no-name punks waltzed into your territory and brazenly took from one of your clients. It was a shameful loss of face and while you can no doubt obtain blood in compensation, the carrion birds will begin to circle if your weakness becomes generally known. And, if I may be candid, our captain, your counterpart, would be sorely aggrieved with us at our missteps in the matter. To be blunt, we’ve both stepped in dogshit.”
Ugly Truth is my favorite social skill. It is the BEST social skill for helping with one liners.
I’ve also used it to convince NPCs they’re in a hopeless position (outside of DoW).