I am playing a game similar in concept, Haven and Hearth. Permadeth for characters, with the new incarnation having its stats reset but you keep 25% of the skills and experience points (or 75% depending on a certain setting). Both mobs and players can attack and kill you, but for players to do so they have to purchase an expensive skill.
It works out fairly well. If there's a notorious murderer, you can appeal on the forum to Rangers - strong players who can track down and kill a murderer.
Fairly small (3-5 thousand, only ~1k at once) playerbase, very large world.
I'll keep my eye on this one.