Dungeon Siege @ Gen Con
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At one point during the demo, one of the characters reached zero health. If you are familiar with 3rd Edition D&D rules, this might sound familiar. Instead of losing the party member right there, she simply crumpled, very convincingly, to the ground unconscious. At this point, the Krug monsters, not perceiving her as a threat anymore, moved on to the still fighting heroes. After combat had finished, she stood back up, but with only 1 hp. This way, we had to wait for her to regain health, creating a great balanced system for losing characters. Of course, if the enemies had continued to attack her, she would have been killed and lost completely. Personally, I found this amazingly cool as I had people getting knocked out left and right.
Along with the report, they also have 23 new Gen Con screenshots showing lots of good in-game footage.