There are many ways death could work in MMOs...

I can't tell if that's a serious question.

The Death Penalties: 1. Equipment Loss, 2. Expertise Loss, 3. Character Loss. Character Loss is a combination of both Equipment Loss and Expertise Loss.
When and where are these death penalties appropriate?
Maybe, the surface level can impose Equipment Loss and middle level can impose Expertise Loss and deepest level impose Character Loss. So, Hard Core mode is available to players that wish to spelunk to a lower level.
Variable death penalties based on meaner of death or creature that killed your character was suggested by another. I wish to add that variable death penalties can be based on the depth of terrain too.

One thing I really, really loathe in mmo games is perma-death and full PvP Looting. I've had very bad experience with this death penalty, as I've played games like Darkfall Online, where people was killing one another and grouping up and once you are dead, they can steal ANYTHING from your inventory, which I really loathe and made me uninstall the game and never touch it again. I considered all games that carry that extreme death penalty into my blacklist/avoid list.

There is only a few things that I don't mind is if you die, you suffer a bit of res sickness if you resurrected from the graveyard, or you can walk to your body in spirit form and don't have to suffer from res sickness, however no matter if I ressurected or not, i've still suffer from equipment damages which can cost me a bit of cash, however if I continue to die alot, it will cost me alot of repair. This is World of Warcraft's style of death penalty and I liked that death penalty. I do not like experience reduction and de-leveling as it can be a major pain in the *** to get it back up, and causes alot of hindrance, I don't want to grind level 89 Naga warriors to get 1 out of 4 bars to pay off after a failure of a raid that wiped more then 5 times, so to speak.

One thing we need to keep in mind is the weight between risks for the sake of immersion and risk that'll end up alienating players. As with Dark up there; Losing everything or a large chunk of the things I've worked towards because of player causality would put me off the game immediately. It'd be a literal waste of time for me to sink that much effort into a game only to lose it for various reasons.

I'll relate to WoW as I've been playing it at varying levels of "hardcoreness" over the years - and yes I'll agree there is 0 risk.
Hell; If I take the 15 minute "resurrection sickness" I can just hop onto another random character of mine and wait it out.
There is literally nothing to dying in that game and it's a proper example of the extreme of too easy.

As I mentioned I dislike the notion that I could permanently lose what of most I gained because I died.
Although I'm a fan of somebody getting something of mine upon being killed and my body looted; maybe a cut of my gold? Still invokes the notion of PvP for pillaging but the player isn't at extreme risk. The only backfall I see is people sending gold to alts.
(In which I'll add the "ear" system from D2 was quite fun as well.)

The idea of an exp loss while leveling also entices me; It's not much more than a loss of time. I'm sure I could live with it and even grow to fear death while leveling because of it. I could see how it'd put off other players but it's not anything extreme.

The idea of different penalties for different aspects of the game is also interesting.
Or the option of players being able to choose just how hardcore they'd want their game to be. I just don't want to see anything but "achievements" coming from enabling such options.

Oh, excellent point. I'd like to hear some feedback from advocates from the various styles of PvP to see how such a mechanic would work.
Permadeath:
I'm not sure if Permadeath players would have the advantage or not. Sure you do X% more damage, but once you go down, the enemy could just corpse camp you. It will take a sizable force of your allies to push away the campers and resurrect your body. If most of your force is made of Mortals, well at least you had a glorious life.
You could always just log out, and come back at a later time after the battle had died down so that players could resurrect you. I suppose that would make Permadeath players juggernauts who would keep to open field battles, but avoid the death-trap that fortress combat creates.

Gear Damage:
As for gear damage, I'm not sure. My plan had 0% gear damage if you're resurrected by a player. This would encourage that "leave no one behind" mentality that I feel most zerg PvP lacks. Teammates might harass a player to just take the loss and revive in town, but the player would have to weigh the permanent damage to their gear against a quick return to the battle. The harder their gear was to acquire (and the rationally the better it was), the harder that choice would be.
If the %damage was 1%, a player could revive 99 times before this had any real impact.

If they chose to retreat back to the village they were bound to, they would pay a minor cost to repair their armor. If they were PvPing penniless, the Armor Summoner would simply pull from their bank - not their body. They'd have to get back to the field of battle though, so the time cost here might be problematic.

The ability to bind your soul anywhere creates opportunities and problems. Your group chose to tactically bind themselves into the enemy fortress while they were inside. Death now gives you a tactical advantage where you're able to flank your enemy from WITHIN their fortress. That is, until they find out where your spawn point is, and stand over it waiting for you to return.

The existence of NPC armor summoners and NPC priests of revival creates an opportunity for control as well. Raid the enemy village, kill the armor summoners and revival priests cutting down the reinforcements. Turning the town to your side might involve a different mechanic, but that would be a very interesting spread of warfare indeed.

The ability to steal armor/coin from players would be something that would differentiate the PvP servers from the PvP+ (Hardcore) servers. I don't see a reason to not have both if there is a large enough population to support both play styles.
Assuming one kill meant one piece of gear could be stolen, a player who lost all their belongings would have to return the favor twice as much in order to come out on top. I am not personally a fan of this style of cruel play, but some players are.

It seems like you're looking for a lore reasoning for why your armor is damaged, but you are in one piece.

My solution was posted earlier, but I'll summarize:
Death and Rebirth:
When you create your character, you're guided to a NPC Healer. You're told that, thanks to the will of Anashti, there is a way to take the future potential of your spirit, and reincarnate it into a new form of yourself.
The process is irreversible. You'll become immortal, and be able to be brought back from the dead in a new body at any time.
When you choose this path, your name becomes visibly blue.

The quest pretty much strong-hands you into the decision to choose this path.
Should you continually refuse the transformation, you remain a Mortal, destined to die a permanent death. (You can be resurrected by a player, but you will never have access to the revive locations until you perform the transformation process).
Should you choose this path, your name will remain white - just like the NPCs. You can choose immortality at any time, but the process is irreversible.

Armor damage:
So that handles why your body is in one piece, and why you're naked. Additionally, this process of revival will turn your corpse in the world into a skeleton wearing your armor.
All of the "energy" of your former self has been absorbed and used to make the new you.
This helps players know who needs to be revived, can create an ominous battlefield of skeletons.

For those who have gone through the transformation, there is an armor summoner who is capable of crossing through the ether and bringing the pieces of armor still on your corporeal form to that location. This process is not safe, and will damage your equipment as it goes through the portal.

Thus you have a lore reasoning for why NPCs die and don't respawn, how players can choose Permadeath, and why players can revive, as well as why their gear is damaged in a nice neat little package of lore.

heres how I would roll the gear damage/resurrect dilemma.

When you first enter the game you will be asked to bind to a magic stone in the city you started in and will be given a simple magic ring of binding. When you die and are not resurrected, the power to transport you back and revive you comes from the ring you were given. As you progress in the game you will find more and more powerful magic items and the revival process will consume "magic" from your equipment to complete the transfer, thus damaging your equipment.

If you get resurrected there is no damage because you haven't transported anywhere.

If you have no magic items there really is no penalty, but in these games that is not likely ever to be the case considering that you will need at least a weapon to attack, even with magic skills.

This also explains why gear is permanently damaged upon death, though a portion of it would be repairable by crafters, or premade repair kits, (which were made by crafters)

makes sense to me.

Ah, you like the casual approach - respectable none the less. For you, the fun of it is not getting set back, or jumping "Extra" hurdles, correct?

For me, it is quite the opposite! Neither of us are wrong, or right or course. Its just cool to see how we can have fun differently. I prefer experience lost, I prefer Corpse looting. I prefer open pvp. Now, I'll have you know upon general principal I never corpse loot, I never steal items that are not mine, and I never murder the blatantly noobish or innocent... but I love these sort of games because jumping those extra hurdles can be very challenging, and difficult for me to do. It puts me into a position where I have to quickly learn to overcome, adapt, or avoid situations.. if I don't I spend an eternity in frustration!

Would I say learning this way gives me certain decision making skills, and a level of patience I didn't have before I played games like that? Certainly. Would I say it makes me a "Better" gamer, No! I would say it gives me skills I didn't previously possess... and a rather large sense of accomplishment over little things like pvp encounters handled correctly. Its fun for me that way, which is why I am completely for the hardcore death penalties! Its just the way I like things though, its a personal preference!

I never doubted the possibility of making up some lore to back on-death gear damage up. But thanks anyway.

Let's say the deity which provides your immortality happened to demand that you go on your hands and knees for 30 min real time everytime you get brought back. That you could call death penalty and were explained by lore. I'm not mocking, just trying to make a point (assuming that you wouldn't like it).

See, viewed from the outside there's still a difference between lore and lore made up to justify an a priori set regulation.

I'm still claiming you accepted on-death gear damage in the first place and that this acceptance is learned/didn't come naturally/intuitively. ?

I'm not against the immortality provided by a goddess or the ring of binding, since I accept that we want to circumvent permadeath. So lore that explains that and how one can overcome death is fine with me. With measures to counter the acquired meaninglessness of death I am more sensible.

What I could accept would be that the enemies that killed you would go on raging on your body some more, so your equipment would still take damage, although you're already dead. But that would be the same kind of damage it would take if you were still alive. Additionally respecting the promised AI your gear wouldn't get the same beating everytime, sometimes even none, when the enemy has yet to deal with other players.

If permadeath, then don't rez to graveyard

Indeed, often times the need for a mechanic comes before a need to justify it lore-wise. I can't say I blame dev's for trying the many different death penalties that they have indeed tried. I was a huge fan of the Star wars: galaxies way of doing things: you would store your clone data at a cloning station, so when you die: BAM cloned, and all of your gear was cloned too. Made sense lore-wise, while still accepting the fact that you died, and still gave you penalties upon death: battle fatigue and stuff. I mean, sure that works in a Sci-fi Setting. What works for a fantasy setting though? Hm..

lol there you go. Of course, actions taken on your own, vs actions enforced by the game always have differing levels of importance. If the game kills me and say "HA! you missed" and just come back to life, its worlds different than the game saying "you were brought back to life by the power of wuju mystical magical stuff!"
At that point I'm just gonna walk away in shock... but you get my point: when the game you love supports a system, it makes the system more important than if It were just supported by you. Plus, when everyone you know is under the same system, it forms lines of community that make great grounds for conversation and familiarity.

So non-permadeath server = graveyard? THAT is an entertaining thought and you have made my evening.

Exactly what I was thinking... Though, I'm guy who leveled three max level monks in diablo 3 because the first two died... and then there's the plethora of unmentionable monks who died before even hitting max level. Can't figure out how I feel about it, but it does remove the sting of defeat a bit.

(I may have hardcore issues.)

One in this thread suggested on-death option was to turn into a ghost/spirit on site and go looking for a NPC who would be able to resurrect you. I love that idea - at least as a basis.
It means resurrection wouldn't come with penalty, but you needed to do something to make it happen. Ideally there would be plenty of things you could do in general and one or few actually available depending on the given where and when. Some solutions could come with side effects you had to handle eventually, but not necessarily immediately.
Players should be able to resurrect you, too.
And if every attempt to get resurrected in-place fails, the fallback could be a place to which your soul is bound, where you as a spirit could travel to instantaneously and where spirits get a body - a magical pool or doorway or whatnot. This way you would leave behind your old body and your things, of course.

And/or

What I came up with in my last post: Enemies may mess with your corpse, damaging your goods. (If there should be extra damage to the hardware on/after death.)

I'm in love with this idea!

This discussion is not accomplishing anything so I think we need a Noob server and a Hard Core server.

I just happened to be watching a couple YouTube videos as my wife and I get ready to head over to the SOE event. One of them was covering the different Dev diaries and at the end began to discuss this question. When it was originally posed I voted, but now as I am sitting here considering it, I have an idea.

Instead of concentrating on the negative aspects, penalties and such of DEATH, why not focus on the positive aspects, rewards, bonuses and such of LIFE?

So instead of a player worrying about old style EQ corpse drags, or an experience debt, loss of equipment or loss of wealth, that EQ Next focus on some form of counter. The longer a character stays alive, the higher this counter builds. As it builds you get bonuses to experience, perhaps wealth that drops, better items and such. This would give those players who truly want that hard challenge, they can strive to never die (i.e. reverse Permadeath ) and end up with, for example, a legendary weapon. Where a casual player would be challenged to stay alive as long as they can, building an experience bonus and making their play enjoyable too.

Of course, this is just an idea, and it could take many forms. As my wife, Michelle, just said, perhaps you could do both. There's my one good thought for that day. Enjoy!

It's an interesting concept.

• In Lord of the Rings Online, players get a title for surviving without dying to level 20. Rather than risking a challenge, players seeking this title will run away from dangers they could have handled, and are much less likely to take risks.
• Players get used to the buffs they gain due to not dying, and see them as a static portion of their character. When they die, they are now "debuffed" and have to rebuild up to having the buff that other players have in order to be considered "average".
• Some classes, such as cloth wearing Mages, are more likely to die than others, giving them a distinct disadvantage.
• If there is a reward such as a legendary weapon which you gain access to when surviving for a long time, would YOU risk joining a pick-up-group of players who might get you killed?

In my experience, this kind of mechanic makes players more cautious and less "heroic", and more likely to form grouping cliques, excluding new players who are still learning the game.
They avoid challenging content because of the lasting detriment it will cause them should they die and lose their "buff".

Those are effects in the player-base that I'd like to avoid.

I like the idea of building up skill bonuses for staying alive. But limiting them to only about +10% max after spending say 2 hours in combat. And they shouldn't be a permanent state , but degrade while not in combat with a ratio of 4-1
So that hitting max bonus stage would then take 8 hours to degrade back to 0 bonus / and death resets it to zero.
But of course this makes death hurt more at max bonus. No equipment or extra ability bonuses imo though.

Maybe the death penalty awnser is in a conglomeration of things , like skill bonuses for staying alive and equipment damage , plus something else ... be it mini game or just time sinc.

Degrading your character permanently through xp loss would be ok imo , if there was a side quest or some way to gain the loss back. Not just going back to the grind stone , but something emersive you could put off or plan on doing at a later time with a group. That would then yeild the best results ... maybe a double or nothing sort of senario?