Death can come about as a result of physical damage (running out of hit points), or of some horrible spell (or certain other auto-kill abilities). In the case of player characters (PCs), death may be merely a chance to return and adventure again. Most other creatures in the game are not so lucky, and death is a permanent state that cannot be reversed. If death can be reversed, it can usually only be done via respawning or the spells raise dead or resurrection.
The death options panel
For the most part, death from damage occurs when hit points are reduced to zero. PCs are sometimes an exception, as some modules do not enforce PC death until -10 hit points; when at 0 through -9 hit points, the PC is merely dying. (Technically, the game's default behavior is to have this dying phase—modules that do not have it actively kill dying PCs to circumvent the default. However, the official campaigns are among the modules without a dying phase, making that more of a default from a player's perspective.) While in the dying state, a PC can still be healed by normal means, and some modules provide the possibility for a PC to spontaneously heal (recover) while dying. The AI may choose to attack living targets instead of dying ones, giving PCs a greater chance to avoid a full death.
When a PC dies, the player is given the options of loading a saved game (in single-player), waiting for help (in multiplayer), respawning, or quitting the game entirely. Respawning typically deducts gold pieces and experience points. Waiting for help will remove the death options panel, giving the player a less-obstructed view of what is occurring in the game (the death options can be made visible again by clicking the mouse or pressing a key).
In the official campaigns, provisions are made so that henchmen who die can be brought back to life. In the original campaign and first chapter of the Shadows of Undrentide campaign, a henchman will automatically respawn at a temple. In the remainder of the Shadows of Undrentide campaign, a henchman will fall to the ground and remain inert until his or her hit points increase. In the Hordes of the Underdark campaign, dead henchmen remain where they fell until brought back to life via resurrection or raise dead. No other non-player characters can be brought back from death in these campaigns.