Speaking on the Battle.net forums, Blizzard poster “Bashiok” has confirmed that Diablo III will use a dungeon check-pointing system as a way to deal with death.
“Throughout your adventures, and generally at the ends of each ‘floor’ of a dungeon your character is saved to a checkpoint,” he said. “When you die you’re dropped back at the last checkpoint with a small amount of health, and the rest regenerates slowly.
“It’s obviously a very forgiving system as it is. It’s just too early to put a ton of thought in to what penalties there should be, if any, added on top of it.”
“Early” is not a word we like seeing used in association with Diablo III’s development. More through the link.