Jebediah gets full credit for this topic.
What's your favorite character death you've seen at the table? Either as a GM or a Player, NPC or PC - it doesn't matter. What did it mean for you, or for the game in general?
As a GM my favorite comes from a teen Super Hero game I ran. There was a break out at the super villain jail where one of the players just happened to be incarcerated. As the breakout happens, the PC got out of his cell and began trying to help get the situation back under control. The combat was, in one word, epic. In a lot of words, it was simply amazing and highly cinematic. It's the fight that showed me just how good Mutants and Masterminds can be at recreating comic book fights.
Anyhow, fast forward a bit and the fighting has moved in to the administrative wing of the prison where staff has holed up. Villains get in, the hero busts in after them, and then he offers a deal. Him in exchange for the people just doing their jobs freedom. The villains consider it, make a phone call, and accept.
This was all handled before the session began.
When the session began I described the situation, the fighting at the prison, and reports of someone (the player) fighting to help the guards. The PCs rushed in. They knew I'd handled part of the fighting with the other player ahead of time, so him being quiet made sense. They also knew that they were going to get there and help save their friend and calm the situation down. They arrived too late. When they got to the prison wrap up was being done by the staff and there was no sign of their friend. They found him, executed, a few blocks down the road near a sewer entrance. The reaction was...memorable. Shock, outrage, and even looks of betrayal at both me - the GM - and the player - from the person playing someone who liked him IC.
It was a very powerful moment in the game. A sign of the seriousness to come in future sessions as the villains broke the required eggs to make their omelet. I doubt I'll ever pull something like it off again, but man it was awesome.