As a player, one of my finest characters survived death by exactly one hit point in a climactic battle to fulfill a major quest. I initially thought he was dead, until the GM walked us through the last few rounds and found a hit point I had missed. I think this represents the finest balance point of gaming. The GM should make the players fear the death of their characters, but should also work toward survival, even if only by the thinnest of margins.
As a GM, I am dissappointed when an encounter turns out to be a cake walk (a skeletal dragon dropped in only four rounds!?!) and yet I do not want to mercilessly sacrifice characters on the altar of my sadistic glee as my glorious monsters grind them into powder.
As a case in point of how I work to balance peril with survival, I can think of two encounters in my recent group's history.
In one, a cliffside combat against a couple of wyverns, one of the wyverns was killed just after it had successfully grappled a party member. I described the scene with agonizing detail as the character was slowly pulled toward the precipice by the dead weight of the wyvern's corpse. Character makes a ST save (which I knew they'd fail), and couple of characters make Reflex and ST checks to leap to the rescue and pry the Wvvern's jaws loose, ultimately succeeding. Lots of drama, player is sweating bullets as checks fail, but ultimately, our hero lives to fight another day.
The point is to achieve drama, not necessarity to "punish" shortsightedness or poor tactical decisions.
Another case in point, two characters took it upon themselves to break down a door that led into a room that housed four trolls (RotR 3, encounter C7), while the rest of the party watches from afar. Suddenly two characters are cornered and under attack by multiple trolls! First troll hits the party's heavy hard, dropping her to under ten hits in a single round (both claws hit, one for a critical, plus rend). Remaining party members charge from a distance of over 240 feet, taking three rounds at a full run to get into the action. So how's this for drama: Bellows of rage from within the breached chamber, one of the heavies comes staggering out of the door, blood streaming from gaping wounds, and the rougue is left inside to fend for himself as two more trolls come barrelling out of another door. Again, ultimately the encounter was survived, but characters fear for their lives and the lives of their companions from the outset.
In the immortal words of King Einon (Dragonheart): "Death should be a release, not a punishment"
