Alas, Death comes for us all. More than once. The first thing to remember when this happens is: Don't Panic!
When your character dies, you end up naked as the day you were born, sitting on a cloud somewhere above the world.
You receive a ball of light upon death, so you aren't forced to wander in the dark back to your corpse. Your corpse is left behind in the room where you were killed, together with all of your equipment.
Your gold stays with you up to level 10, and then also remains in your corpse upon death.
Following and groups are not affected by death, however any spells which were affecting you are cancelled by death. Also, you will lose experience points for dying. The amount you lose is roughly half-way back to the beginning of your level, though Worship can have an affect.
Corpses decay after time, leaving your gear open for any who wander into the room. As soon as that happens, that equipment is no longer officially yours. The only exceptions are owned items, which other players will not be able to save with. Again, Don't Panic! Player corpses last roughly 15 minutes of real time. Only the player who died, or an Immortal, can retrieve objects from a player's corpse. To retrieve items from your own corpse, type 'get all <yourname>' or 'get all pccorpse'.
If you are a new player here, there will be a spirit hovering above your corpse to help you find it. It will be there as long as your corpse is, and it provides light in the room, so you will be able to collect your belongings.
Any items that Tul-Sith gives to you on death will only last a short period of time - it exists only to get you back to your corpse. Once the time period is up, the gear will be taken by an imp, right out of your hands!