When you die again you lose all of the demon souls you've collected from your hard graft, and have to fight your way back through the level to your own bloodstain to regain them - at which point you either have to sprint for dear life away from whatever killed you the last time, or face getting unceremoniously dispatched by it once more. Die a third time before you make it back to your bloodstain and those souls are gone forever, which is truly heartbreaking when you have to work so hard for them.
To summarise, you end up playing the vast majority of Demon's Souls as either a dead person or a dead person with no money. Every time you die, you start again at the beginning, with all the enemies you just struggled to overcome back where they were. There is no compromise. There's not even a pause button. You get better, or you get nowhere.
(Oh, and also - after a certain point, other players can invade your game at any point and attempt to assassinate you, just to make life even easier. But more on Demon's Souls' online capabilities later.)
If that sounds unbelievably frustrating, well, yes, it can be. It's harshly punishing. But it's not unfair. Demon's Souls puts you up against impossible odds, after all - you're the only living thing left in the world, apart from the stranded, struggling survivors that you occasionally come across exploring some dark tunnel in the Tower of Latria, or down a forgotten mineshaft in Stonefang Tunnel.
The only thing to do is try again, and again and again, observing the demons' behaviour and the layout of the levels, learning the cruel tricks that the game plays on you to lure you towards death, until, finally, you're capable of winning.
Precisely because the odds are so stacked against you, precisely because the game sometimes seems to hate you with every fibre of its being, when you do finally kill the bastard f***-off enormous boss monster that ended you within half a minute the first time you approached it, the resulting heart-in-mouth euphoria is the purest kind of gaming thrill. Demon's Souls is about facing up to the impossible, and winning.
Because dying sends you straight back to where you entered the world from the Nexus you spend a lot of your time working through the same sections to make it back to where you were, especially if you were slaughtered by the boss at the end of that section. But it's not grinding. It's not about slaughtering things mindlessly until you've built your stats up enough to progress, though repetition is a part of it - instead it's training, learning, figuring out new strategies, experimenting with different techniques.
Skill is what determines your strength in Demon's Souls, not numbers. Technique will always make up for thousands of souls spent on attribute points. Every time you die, you learn that little bit more, get that little bit further; it's addictive, masochistically so.
And yet, the game manages to hold the constant threat of death above your head without ever feeling meaningless. In games where you spend a lot of time dying, that fear of death tends to dissipate - death is rarely even an inconvenience in modern videogames, nothing more than the threat of getting sent back two minutes to the last automatic checkpoint - but not here.
Once you get your body back, finally, the very fear of losing it again makes you chicken, reluctant to probe too far into unfamiliar caverns. Demon's Souls can inspire sheer terror, make you fear for your life; you never know what's lurking around the next corner, exactly whom those two glowing red eyes in the dark at the end of the tunnel belong to, but you do know that whatever it is, it will probably hurt you. Badly.
Demon's Souls' foreboding atmosphere reinforces this fear. One of the first things the game asks you to do is turn the brightness down. Its world is comprised of dark, ominous places - a prison tower wracked with the tortured screams of undead captives, an abandoned mineshaft that gradually opens out into a massive underground complex inhabited by a variety of horrible things, a crumbling fort guarded by skeleton warriors.