I want to get your take on something. So last night my "Tales of Darkmoon Vale":http://www.obsidianportal.com/campaigns/tales-of-darkmoon-vale gang got together for another game session (we're just about to finish up with Paizo's D1 _Crown of the Kobold King_). The group confronted the chief villain of the campaign, Merlokrep the Kobold King, and two of his elite warriors. It was a tough fight (CR 8) for our band of 4th level adventurers and two of the party members went down in battle. They didn't end up dying but one of them came pretty close. This wasn't the first tough fight I've thrown at them, they've had at least two other battles that, by the 3.5 Encounter Difficulty standards would be rated "Very Difficult," and in one of these, a PC _did_ die (though he was latter resurrected).
Well, when things started to heat up two of my players really began to gripe, especially after one of their characters went down. The third member of our group had a blast however; he tends to thrive on dangerous encounters. Afterwords one of the former players came to me privately to complain that the encounter difficulty level of this battle was far too high. His position roughly was that the PC's shouldn't be confronted with combat situations in which there is a decent likelihood that one or more of them could die. I disagreed. I pointed out that according to the 3.5e DM guidelines for Encounter Difficulty, while most of the CR encounters the PC's face ought to approximate the party's level, at least some of the encounters in an adventure ought to be "difficult" (CR 1-2 levels higher than party level) and one or two ought to be "very difficult" (CR 3-4 levels higher). In these encounters it is totally possible that a PC will die. We went back and forth on this issue for some time, and it became apparent that each of us just had different expectations here. In general I feel that a quest ought to involve a bit of real danger. Not _all_ heroes in the story books do survive (think of Boramir), and risking one's life and limb to fulfill a quest is just part of what makes the quest so exciting. Likewise, virtues such as courage and honor in battle would be meaningless without such a risk. As such, parties ought to come to expect a fatality or two in their career as an occupational hazard of adventuring. My player's thinking on the other hand was that it would really be lousy to have invested so much time, effort and care into a character only to see that character die midway through a campaign. The looming threat of death might thus either prevent him from fully investing into his character, or make him a whole lot more skidish in combat.
So here's a question for you DM"s our there. How do you deal with both challenging encounters, and PC death in your campaigns? Regarding challenging encounters, I assume that most of you probably have them. But what happens when say that Deathknight lands what would be a killing blow on one of your PC's. What do you do? Do you fudge the roll or do you let it stand? Have any of you ever had PC's die in your campaigns before? If so, how frequently has this occurred, and how do you and your players usually deal with it? I realize that different systems might have different conventions for dealing with this matter, but I'm just sort of trying to get a feel for the conventional wisdom on this issue. Anyway, curious to here your thoughts.