You lose the EXP on death. You regain a small percentage if you are resurrected, but regain none if you respawn in town.
I do believe there are self-res scrolls you can buy from the Item Mall or can be obtained as some quest reward.
You lose the same amount of EXP regardless, if you are under normal state. However, characters performing a job (Trader/Thief/Hunter), or offenders/murderers lose less and more experience per death respectively.
Under normal character state, the chances of dropping something are very, very small. The only thing in your entire inventory you cannot drop is your equipped weapon. Even characters doing jobs have been known to drop their job suit upon death(!!).
Hope this helps.
