To each his own I suppose, but I absolutely hate respawning the way it is handled in MMOs. It makes your achievements so utterly pointless when an NPC asks you to defeat some evil boss, you go out and wade your way through hordes of enemies to defeat the big bad guy only to find that he's alive and well ten minutes later and you can go back and defeat him again if you want to. It's really bad for my suspension of disbelief -- but then I'm the kind of guy who plays games to be immersed in a world and a story and not to prove myself or to gather huge amounts of loot, XP or whatever. I just don't see the fun in all of that competitive stuff. Sure, I enjoy the sense of pride when I find myself progressing, getting cool skills etc. but that's just a nice extra to me. So I'm very happy about the way it's handled in D2.
Now in Oblivion, the respawning is handled very well, I think. You don't notice it. And I seem to recall that the dead bodies of defeated enemies stay there on the ground. Once you've finished a quest, you've really finished it - it's a living world. The only thing I really wish they had done was rebuilding Kvatch.
Now I feel like playing Oblivion again:)