To summarize, John wants to play a gamer where your avatar is invulnerable. And Scorpia isn't sure that this is a good idea. Could a game where the challenge of death was removed actually be fun? Seriously? And if so, how would you make it fun and challenging for the player? To answer the first question, I think that yes, you can make a game without death fun and challenging. Allow me to elaborate. Firstly, we need to analyze it from a game design point of view. Is it actually death the player is afraid of in RPGs?

No. It can't be death. The player can't permanently die. A quick whack on reload and WHOOSH, back to life and fighting fit. No one would actually play a game with a real threat of death, anymore than anyone would ride a roller coaster that had a good chance of actually hurling you into the ground at high velocity. So what are players afraid of?

First, failure. Simple enough. No one likes to run slap back into the "you weren't good enough" lamppost. Failure stings. Success makes us feel warm and fuzzy and powerful. These emotions alone are enough to provide the desire to avoid death, But there is more. Penalizing a character resource. Some RPGs require gold to ressurect a character, some drain experience or apply an experience penalty for a time after you spring back to life. Either way, players hate feeling like they're losing out on something, even completely virtual resources. So this is another motivator to avoid death.

Thirdly, penalizing the players resources, invariably time. The old arcade games could cost you money to buy another go but this doesn't work for a home system, so costing the player some time in the form of lost progress is essentially "it".

None of these elements are inherently tied to death and death alone, which is why I definitely believe you can make a game without it and still succeed at providing the player a challenging and entertaining experience. The reason death is usually the main way of challenging the player in RPGs is because, usually, the player's avatar is the main thing he has to lose. The avatar's setback is the players. Almost all of the players interest is invested in his character or close companions, so putting them in mortal peril has been the mainstay of providing challenge to the player.