Death in EoC is actually a three-stage process: First, incapacitation (health bar drops to 0); second, a restricted state with its own health bar (10% of your main health pool); and third, body destruction (no resurrection, only respawn). Your body can also be looted at each stage of death. If your body is destroyed, you will drop gear, which can be picked up for up short time or become buried in the world.
Embers of Caerus is also implementing two types of stat penalties upon death, one temporary and the other permanent (along with a system to counter the permanent loss). Dave continues on to discuss the karma system, body mutilation, and the chance of repentance.
With so much important information, don't miss the video after the break.
[Thanks to all who sent in the tip!]