This is an idea for more heroic style campaigns. The goal is to increase character survivability at higher levels, without taking the fear and danger out of adventuring. The solution is to steal a page from Warhammer Fantasy Roleplay but put a decidedly D&D twist on it.
Here's how it works:
When a character is killed, be it through loss of hit points, failing a saving throw versus death, through poison, spell, or treachery, the player may opt to have the character lose a level instead. The DM or player can then describe a suitable "close call" that almost took the character's life, but that they escaped by the skin of their teeth. The character is still taken out of action for the rest of the encounter and suffers as much loss as possible, short of death or permanent disability.
The level loss is permanent. The character must earn back the XP to regain the level. If the whole party falls, they'll surely be robbed, and quite possibly enslaved or imprisoned for ransom in addition to the loss of a level each.
I like this system for a couple reasons. First, it allows for a little more continuity of character at higher experience levels. It makes heroic characters more robust, but it doesn't mean there are no consequences for deadly encounters. It is also tied directly into the D&D level system, meaning it can be used with a minimum of fuss. Unlike WFRP (a game I love deeply, I should add), the fate point mechanism isn't a separate pool.
The system also has interesting implications when viewed in the context of level draining undead. The touch of a vampire is as bad as being killed twice, and I like that. The more soft-hearted DM has fewer worries about introducing deadly poisons and "Save or Die" effects in games with beloved characters, but the players still aren't free to take these kinds of threats lightly. It turns levels into a slightly more fluid resource, something you can expect to gain and lose from time to time. It'll take longer for many characters to reach higher levels, but at least they have the possibility of getting there without relying too much on Raise Dead spells, which could themselves be quite rare.
First level characters are still in the same horrifying danger they've always been -- they just don't have any levels to spend. This means that 1st level remains the gauntlet. If you make it through, you've established that you're "hero material." If not, you were just another desparate bastard who tried.
Optionally, you could rule that a first level character has the option of losing a level and becoming a "normal man." Having experienced harrowing encounters in the otherworldly halls of a dungeon, the character tries to get out of the dungeon as soon as is (safely) possible to retire to a peaceful life of farming and telling his tale to village youths and passing adventures at the local tavern.
I'd also restrict the system to PCs (hirelings wouldn't have access to it). It might be extended to the greatest of villains and monsters, which would allow for recurring foes, but I'd actually be hesitant to use this much (if at all). As DM, I have plenty of other tricks up my sleave, and it's usually more interesting to let the chips fall where they may. This "fate point" system already has a high potential to create recurring villains without allowing villains access to the fate point effect. Eventually, at some point, some villain or monster may well score a TPK. The characters will each lose a level, all their worldly goods, their pride, and perhaps their freedom. When they recover, it'll be up to them whether to pursue vengeance against their enemy or not, andif so, when. Also, I don't feel that giving the PCs access to extra "lives" is necessarily just a perk for players. The DM's increased ability to throw "Save or Die" effects around with greater impunity is already a nice perk. And if it means more buy in on characters, and less need to cross "Thorgo" off the character sheet and write "Thorog, Thorgo's brother" on the top, I'm happy with that too.