One of my favourite ever posts to this blog is called "Running the Gauntlet" based on my experience of of being ambushed by pirates in a gate camp. I can still remember the adrenaline rush when I realised that I stood to lose almost everything I owned in game if I was killed. Death in EVE is harsj but that very harshness greatly increases the emotional involvement in the game. Therefore when Tobold asked for ways to make mmos harder I immediately thought of harsher death penalties but I pulled back from fully recommending it because in reality a harsher death penalty where you lose items or lose experience or suffer some debuff ultimately boils down to a time-sink where you must spend more time to get back to where you were. Green Armadillo explains this well in his blog. The last thing mmos need is yet another timesink.
Is there a way to make death significant without it being a timesink? I have been trying to think of ways.
One thought is to use a title or award for not being killed. Many games already have such a title (like "Survivor" or "Undefeated") but once you lose it it is gone forever so it becomes meaningless for most players after their first newbie death. How about instead a resetting title that indicates the number of days since your last defeat? A lot of folks like having a nice title so the risk of losing a few ranks could make people more wary of death even if it doesn't reduce your game strength in any way.
Another slightly more wayward thought is to have actual permadeath where you character dies and is not resurrected but but you can immediately create a successor (son or daughter) who inherits all their stuff and skills. The only thing you would lose is the original character's name and appearance. People get attached to names, I think this could work. Some thought would need to be put into the impact on gameplay though. Can people still be rezzed for example?
Another thought - remove the in game penalty and replace it with a real world financial hit. You have to pay real cash to resurrect your character. As bizarre as it sounds most free to play games already have a version of this - there is usually something you can buy in the item shop which removes the in game death penalty. I am not really supporting this though because there are way too many difficulties - the unfairness, the moral hazard of game developers making games harder to increase revenues, the lack of any in game significance and so on.