I love playing perma-death. I get really attached to my characters, and when they die, it becomes a really sad time. But it means I'm really careful with my characters, and makes me that much more careful with what they do. I love recording their adventures with fraps too, then once they die, I make an emotional montage and a slow "Sean Bean" style death scene.
So I'm probably the second option. I find that it really enhances my role-playing experience, because it means that I'm as concerned with their self-preservation as they would be.
What about you guys?