I have the player of a deceased character make up a new character. Then the player has to wait until I can provide a situation that allows the new character join the group, which may mean the next session depending on when in the current session the previous character died and what sort of location and situation the party is involved in.
Wow, a lot of different ways of doing things. I guess I am way old school. Back after the original white box, I started DMing with the hard back books. Usually the groups were pretty much hack and slash. Either they all lived or all died. That was simple. As I matured so did my games. There were no 'rules' on what happened. If you character died, and he was low level, you rolled up a new one and waited for the DM to work you into the plot. After that, it was understood,
by the party, that if your body could be recovered you would be resurrected or reincarnated. The PCs decided among themselves.
With Pathfinder out, and me loving D & D and not liking 4th, I am working on DMing again. Its been a while, but how to handle a party death IS an important question. I know one of my best friends, who I nudged into gaming, goes to great lengths on character background. So, what to do is now something I am looking at.
If coming back from the dead was easy then the characters wouldn't be suitably cautious. Also, I am a DM that is an "us verses them" way of playing, BUT, the one rule that supersedes even that is the story. While I don't plan on killing anyone, my monsters and NPCs are not flat card board NPCs. I play them. That's how, as a DM I have fun. No, it doesn't mean that I am going to kill the party. But it does mean I will use everything (legally) I have to win while I am playing the dragon or the Orc commander.
I have never had a complaint about killing a character, as I make sure the players know its fair. And after, usually it was some battle, so there may be some down time for the players to grab a snack, bathroom break or work on their characters for xp or treasure. Then I either work with the newly deceased or if they are very experienced, they may sit out the game working their character up. Luckily the people I have played with have been mature enough. As I have gotten older, I have gotten picky on who I play with.
Now for me, if I die playing a character; I don't throw a fit unless its a stupid death or the DM lied or mis-played something. Luckily, as stated before, the party usually has a death clause; we will use the party treasure to resurrect a deceased comrade before we split the treasure. You can buy the item for yourself, and that money goes to the temple/resurrection.
At Gen Con once, when it was in Milwaukee, I ran into a player who had a very interesting outlook. he said you never talk about the character that made it to 25th level, married the princess, had kids and his holding is expanding, his kids are good and that hes playing them now. That's kind of boring to listen too. No, you talk about how your character died. Either from doing something stupid or doing something bravely, but ultimately fatal. THOSE are the characters that live on in the songs of the bards around the fireplace. I thought about it, and in my opinion, he was right.
In short, maybe I have just been lucky as a player and as DM when it comes to this - lookey there... made my save.