The whole having people not die from dismemberment might be a little much. If they did it with Zombies and had them drag themselves towards you would be pretty awesome.
This. Actually, I would see dismemberment working with a variable, which only invalidate ennemies, and happening VERY rarely, to keep the hype.
Humans would of course fall down, yelling as hell and finaly fall uncounscious (death, to make it simple), But I would to see a Troll still continue to charge you, maybe even regenerate, a zombie crawling on the floor trying to eat your flesh, or even a vampire throwing his arm at you in a rain of swears ^^
Kinda like the "broken member"in Fallout, except that it can actually go off too.
Bad side is, it would be pretty unrealistic to not see the player dismembered too... and THAT would be pretty much lame to have to drag your body without legs for the rest of the game.
But as I said, for "humans", dismemberment leads to death, so I guess it's ok, as your character is going to die anyway.