Well, let me clarify: Someone who can't play a character that fears death even though he knows that the character won't die is not someone I'll play a roleplaying game with. That's where I draw the metagaming line.
Actually, I think a much better way to frame this discussion would have been to ask whether certain game conventions, e.g. wish lists and the presumption that the characters would be facing "balanced" encounters, serve to increase the difference between the player's mental state and that of the character's, whether this could cause the character's in-game actions to seem artificial and contrived, and if so, what can be done to counter it.
It is arguable that when a novice player, who is himself unsure whether his 1st-level character could defeat the enemies his party is facing, says that his character stays and fights, the action seems more heroic than when the same 1st-level character is played by an experienced player who knows that his PC has a good chance of winning the fight.
To take another example, if a character finds a magic item similar to, but less powerful than, one on the player's wish list, would the player's feelings of disappointment that he did not get the item he wanted color the character's presumed excitement at finding a magic item in the first place?
Assuming you agree with the design goals of more balanced encounters and wish lists in the first place, what can be done to make the player's mental state closer to the character's mental state, and presumably, make the character's reactions seem more realistic?
EDIT: Actually, I've forked this post off into another thread
here, if anyone is interested in addressing these issues specifically.