A new work-in-progress on Steam Greenlight is playing with the idea of permadeath in an interesting way. One Life is a MMO survival first person shooter. You can team up with friends, scavenge for supplies, raid enemy supplies and build your chances of survival. The catch is that if you die, your game is literally over. Your steam account is locked out forever.
This allows for some pretty tense interactions, but that's the idea. The creators wanted to stress that this is the kind of game where you must consider your actions carefully because "your every move can be the last one." The gaming world isn't new to this sort of thing where a character death means all progress is lost, but the idea that one could literally be jettisoned from the experience forever more is a push beyond even what the most hardcore players might be used to.
Interestingly enough, the game will not be free-to-play. The developers are asking for $10 to get into the experience, which wouldn't be bad for a normal game, but can be quite a risk to take when you could literally be put out by bad luck or circumstance. Either way, it will be interesting to see what One Life ends up bringing to the table.
You can see the Steam page for One Life.