No experience loss is good but:
As you already said there are people with slower
connections who die really easy. They don't loose experience anymore but loosing items is also terrible
Another problem is: now that people loose their items people start pking to collect the money what can be annoying (even if youre in peacfull mode)
My suggestion:
No loss anymore! people who die will:
a: restart with low hp/mp
b: always restart in bomboria (sp?)
eventally: loose about 100 food points