On that same note we also don’t want to remove the player from the action. Throwing them back to town for every death really breaks up the action, and not in a fun, interesting, or necessary way.

So, with these things in mind we’ve found that a check point system works really well. Throughout your adventures, and generally at the ends of each “floor” of a dungeon your character is saved to a checkpoint. 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.
Regardless, potential penalties aside, this is the death mechanic we’re currently using and it’s working really well so far.

Since childhood, Vader’s nameless agent has known only the cold, mercenary creed of the Sith. His past is a void; his present, the carrying out of his deadly orders. But his future beckons like a glistening black jewel with the ultimate promise: to stand beside the only father he has ever known, with the galaxy at their feet. It is a destiny he can realize only by rising to the greatest challenge of his discipleship: destroying Emperor Palpatine.

The apprentice’s journeys will take him across the far reaches of the galaxy, from the Wookiee homeworld of Kashyyyk to the junkyard planet of Raxus Prime. On these missions, the young Sith acolyte will forge an unlikely alliance with a ruined Jedi Master seeking redemption and wrestle with forbidden feelings for his beautiful comrade, Juno Eclipse. And he will be tested as never before–by shattering revelations that strike at the very heart of all he believes and stir within him long-forgotten hopes of reclaiming his name . . . and changing his destiny.