Hey,
my current plan is to make the game primary PvP (everyone can be attacked almost anytime) with safe zones like villages and couple of starting PvE zones near villages to let the newbies to gain some experience, stuff, etc.
When dead player can be summoned back by techniques such as Edo tensei.
Player near death should be lying on the ground unable to move, slowly dying. Could be healed back to normal state and such heavyweight techniques as Edo tensei are not required.
When dead player is teleported to graveyard and must find his corpse to respawn (same as WoW).
What do you think about that?
And there is one main question. Should player loose his stuff when die?