This subject reminds me a little of ShadowMan.

Forgive/corrrect me if some of my details are wrong, its been a long time since i played that game. Actually, I'm really unsure if this is correct, if it isnt, then consider it a suggestion of how 'death' could be handled.

Basically the game took part in two 'areas'. The real world, and the dead world. In the real world you had to perform certain tasks to track NPCs down. If you 'died' in the real world, you would be transported to the underworld/dead world/purgatory, where you would have to find your way back out into the real world.

Since you are already dead when in the underworld, you cannot die, but if i recall correctly, you had to 'dispose of' a certain number of enemies to charge up something-or-other to get back into the real world, where you could continue on your quest.

Additionally, certain tasks had to be completed in the underworld to open up new areas in the real world, such as new time periods in history where some of the NPCs lived (the NPCs in question were maniacs/psychos/serial killers like Jack the Ripper).

I think thats somehwere near the mark, feel free to correct anything if i've got it wrong. :S

In Soul Reaver, "death" in physical just drops you back to spirit world where you need to find a portal and regenerate your health to full to get back to physical. "Death" in spiritual dumps you back at the start location with a long walk to get back where you were (shorter if you've been activating the warp portal devices as you go. Of course, you could also drop back to the spirit world from the physical any time, and many of the game's puzzles required you to travel in the spirit world for a while between manipulating objects in the physical.

Be careful that in making it seamless, you don't simply add a chunk of repetitive time to a player already losing.

Assuming this isn't an MMORPG, there's no real benefit to a time sink.

There is a new game coming out called Prey, and all I've seen so far is one of the trailers for it. It has an interesting way of dealing with death. When you die, you go to a sort of a spirit world, where these blue and red spirits are flying around you. The blue ones represent your "spirit health" and the red ones are your physical health. You have a bow in this spirit world and you have to shoot enough of each of these spirits to fill your life back up. Once you do this, a portal opens up in the middle of this little area, and you jump back in to your body.

All of this I have gathered from watching the trailer, so don't take it as fact. But if you are into FPS games, I suggest you check it out too

I remember a game called "Prey" being hyped as the first truly 3D adventure in, I don't know, maybe the early- to mid-nineties? I specifically remember one of its primary features being the ability to "look in one direction while moving in a different direction!" It never came out. Is this the same project? Boy, I hope not.

For my part, I hate mini-games for resurrection. I can't imagine them being implemented such that I would prefer them to a quickload. Like Beige said, a timesink is nobody's friend. If you're going to make death a very important event, with a heavy cost, then it should be rare and genuinely costly. You should have to be totally FUBAR to die. If my ship has fighter escorts, warp boosters and an escape pod, then death is my own dang fault. I should have to deal with the consequences of my hubris.

Don't deviate from gameplay. If the game makes me stop playing every time I die, I'll just reach for the power button and go do something else instead.

In the indomitable Quest of Yipe! III, you went to "Yipe! Hell" when you died, and were revived with 1 HP. You had to visit Hell's gatekeeper to leave, and either bribe or kill him. If you killed him (not easy), you had a free pass out of Hell for the rest of the game. Otherwise, you just paid money.