I've killed characters off, but try not to until at least 6th level (barring one exception where I was in a really bad mood and my player pissed me off... but that's a different story). By then, the group SHOULD be able to pool enough cash to bring you back to life. Other than that, I let the player deal with the consequences of their actions. So far, it's always gone in their favor (which really upsets me, since it always changes my game when they do it). I do try and make either the materials needed for a res, or the service, available at all times, though.
As for having a character die, it's only happened to me once. The character that died was the product of a 3 week long discussion with the GM, and a LOT of creative back story, and he died in the 1st encounter (why we were fighting 3rd level orc barbarians at level 1 was beyond me). Pretty much had no desire to go back to that game.
Ultimately, it depends on the players. Personally, I think reincarnate is the best option, if for no other reason than pure chaos (wait, my gnome wizard got turned into a WHAT!? [after bugbear was rolled]). Other than that, remember that the point is that the players are heroes in your story, and your job is to provide them with a challenging, but enjoyable and rewarding, story to play in.
Just my two cents.