A lot of RPGs penalise the player character’s death in some way. Whether it’s a loss of experience, gold, re-spawning elsewhere, or running back from the Spirit Guide to your corpse.

I am not die-hard enough to play hardcoe (where death means deletion of the character), but want to make my toon’s death something I really want to avoid.

Keeping in the spirit of an RPG and bearing in mind, there is no Creation Kit (CK) yet, some of my death penalties thoughts include

• Donate a fee upfront to the local temple (e.g. 100 gold * your level or something). Every time you die, you need to pay another fee so you can resurrect.
  
• Use the Console (player.modav) to reduce health (etc) or combat/magic stats for (say) 2 weeks game time. After 2 weeks, re-mod and remove that penalty. It would be your choice to rest for 2 weeks, or carry on adventuring with the penalty. Additional death during the 2 week period, adds another 2 weeks onto whatever convalescence time is remaining and incurs a further modav penalty
  
• After re-loading your saved game, leave the area and don’t return until you are at least 1 level higher

When the CK comes out, I might look at something more elaborate. Perhaps a combination of option 1 and 2.

What penalties do you self impose when your hero/ine perishes?

If it's a glitch due to lag or something like that,of course I don't penalize. Otherwise, I go with the fee penalty and if I don't have the cash, I lose my highest value armor and equipment. However, I am beginning to shift more towards a "Dead is Dead" outlook...

I like 1 and 2, not 3. It just seems too much work without the CK but I like your ideas.

I think I'll start imposing some penalties myself.

I like option 1. Borderlands did that and I thought it worked well.