I will be submitting some posts to describe some of the more fascinating innovations in Guild Wars 2. I figured that I would start at the end rather than a beginning. So we're going to start with the mechanics involved with losing fights, death, etc.
Determining an order of discussion for this subject is difficult.
The Conditions of Death
The process of dying is, in most games, fairly straightforward. You have a set amount of health, and in the process of fighting take damage, which is subracted from your health. Once this number reaches zero, you keel over dead, and either wait for resurrection in whatever capacity or use some other game conceit to resurrect at a safe location.
Guild Wars 2 adds an intermediate state to this, a step between falling down and being dead. They call this the Downed state. During a fight, you will be reduced to zero health and fall over. You are not, yet, out of the fight, though. Instead you are sitting on the ground, continuing to do damage and hoping to kill whatever downed you. You have a set amount of time that your are downed, and then you are actually, legitimately dead. Well, for the moment. No one wants to just have their character stay dead in an MMO.
Returning From The Dead
Face it, you're going to die in this game. Maybe not early, but maybe so. Much depends on your allies.
When you're dead, there are two basic ways to return to the fight, and these are fairly traditional. You can be resurrected by an ally or you can respawn at a safe point on the map.
There is no Resurrection spell in this game, as they tend to be the sole province of healing classes, and there's no such thing in GW2. Instead, any ally can simply approach your corpse and interact with it. After a small activation time, you will be revived. Hurray! As a fascinating side note, this can occur in or out of combat. I am coming to understand that this will be expected in dungeons, this constant resurrection of allies.
Without the benefit of ally resurrection, you can instead "release" and travel to an appropriate location. While in an instanced dungeon, this will be the beginning of the instance. If it's out in the world, you will travel to a waypoint on the map in exactly the same way you would normally, paying a small fee for the privelege.
The Process of Dying
When you're Downed, you're not out of the fight yet. Your character falls down on the ground and can only crawl really slowy, if at all. I'm unsure on movement. Your screen turns all red to reflect the urgency of your state, and a bar appears with 4 skills. These skills will be unique to your class, but not defined by your weapon (I think). They allow you to continue harming your enemies, do fancy irritating things like stealth and/or teleport, and also heal yourself a bit if you're not being still damaged.
While you are Downed, a bar is shown over your 4 abilities, and it slowly empties. This represents the amount of time you have before you are Dead, and also is an abstract health measurement. If you use your channeled self-heal, or if an ally attempts to revive you much as they would for resurrection, this bar will fill back up, and once it is full you will Rally. Rallying is the term for returning to being a proper active combatant.
Another way to Rally is to kill an enemy. As I mentioned, you have damaging combat abilities which you can continue to use against your enemies. If one of those enemies dies, you Rally, get back up with most of your health, and life continues as before.
If you are Downed underwater, the process is pretty much the same, with one slight change worth noting. You can swim slowly, and if you break the surface you Rally. A big message splashes across the screen urging you to get to the surface, alleviating any mystery. If you fail to heal yourself up, murder an enemy, or surface before the timer runs out, you are defeated as normal.
So, they removed the time sinks from dying, the long, painful walks back to where ever you died. But they had to do something that would discourage you from doing dumb stuff over and over again. The lesson, so to speak, that you are not ready for whatever it is you're doing, or at least are doing it wrong. There are two ways they penalize your character for dying all the time.
If you have been recently Downed/Defeated, the amount of time it takes an to revive from that state increases. Die five times in one big boss fight and it's likely your allies won't be able to devote that kind of attention to you to get you back.
In Guild Wars 2, they have also implemented armor degradation, but not with an arbitrary durability number, as WoW does. Instead, all armor has basically 3 states: whole, damaged, broken. There is not game effect unless a piece is broken; being damaged is just a step, warning you that things are going to go wrong. When you are defeated, not just downed, a single random, undamaged piece of your armor will become damaged. If all of your armor is damaged, then a random piece of your armor will be broken, and any benefits gained from it will be gone. You can repair armor by talking to an NPC in towns and paying them some gold. They will repair items all the way up to whole.
The advantage to this system is that you will only ever need to repair your armor if you are defeated. If your are downed and rally back, your armor's fine. If you're never downed, your armor's fine.
I love this. They redesigned the concept of death into something that should be avoided but does not inherently interrupt or remove the fun from the game. Certainly, dying will suck, especially if it happens a lot of times in a row. But they have approached it differently, and I'm looking forward to seeing how this affects the overall atmosphere of the game.