I see a lot of talk when a character dies in storyline, how people coment (often jokingly, but sometimes serious) that items like Pheonix Downs can work in battle but not in storyline, the answer that most people give is that they're just "game items".

This however is not the case. When a character's HP is reduced to 0 s/he isn't actually dead. They are actually supposed to be in a coma or something like that, Pheonix Downs and the like are supposed to bring them out of said coma. I don't know about "Game Over" though - either they all wake up at a Save Point, or they are supposed to die from being in a coma, other than that they are not dead.

I don't remember if any translations actually referred to them as "dead", but one reason people get this wrong is because of the "Life" spell - I think it was called "Rise" or something in the original translations (not sure, but whatever it was was less misleading).

They even explain this in FFV (SPOILER)When Gaulf dies, the other characters try to save him by using curative items - including Pheonix Downs, but since he is dead (and not unconcious) it doesn't work., so why all the confusion?