I've included deaths within my fic, usually being quite violent. Generally it depends largely on the audience. If you look at a movie for example, you'll notice that death can happen, though it's usually to a more evil character (Disney movies are a key example of this). However, keeping Disney in mind, look at how they portrayed the death of Mufasa. That was a pretty nasty scene considering it's a child's movie. Also of note is that a lot of death in Disney movies is implied, however you don't actually see how they die. (Falling down a pit is a classic).
It depends largely on audience though, really.
As for how to deal with killing of characters, I think the prime factors are how nessesary it is to the storyline. There's no point making a massive deal out of killing a character who's only going to be breifly mentioned, or osmehting like that. However when it comes to prime characters, then the factors of how nessesary it is come in. Then of course you need to think of why they die, who kills them, the effect it will have on the other characters, things like that. As well as whether or not it is nessesary, you need to be able to portray the emotions based upon the personality that a death would have on your characters. Some may be taken aback and become secluded, some may be driven insane, that's up to you, but you need to remember that you're the one that needs to portray this.
I think one of the benefits of killing your characters is that it gives the reader somewhat more attachment to the story. For example, when Sephitorth kills aerith in Final Fantasy VII, it was unexpected, and led to showing how evil Sephiorth is. In turn it also led to a more developed feeling and more motivation to kill the guy for the player.
If you have a bad character who kills off one of the primary characters that is actually liked, then the reader will most likely develop a strong feeling of resentment to the character that did the deed, and as a result will want to continue reading, especially if it is implied revenge will be taken.
Things like death are good to play around with in my opinion, and I myself will be using the theme on several occasions in my fic, apotheosis, both prime and minor in nature.
-Josh