The following is written from the perspective of a worshiper of the Immortals and does not cover alternate explanations at full depth or with perfect knowledge.
Qualities of the Soul:
The soul is an incorporeal organ of the body. Though it cannot be directly detected outside the use of divine, demonic, or Holy magic, it is real and its health has an immediate impact on the health of the body. Further, the soul is the locus of awareness of living creatures. All creatures that have any degree of self-determination have the spiritual organ. If the soul is separated from the body, the individual's awareness and sense of self remains with the soul. What is left behind may be animate or even intelligent, if a good enough Necromancer is involved, but it is not the same consciousness as the former individual.
Souls are composed of a form of energy called, plainly enough, spiritual energy. The priests of the Immortals regard the composition of the soul as an energy pattern very much akin to a spell pattern, and can be criticized for having a very mechanical approach to spiritual matters. Other religions are known to take more "organic" approaches, but while their philosophies can be inferred their practices are unknown in the provinces. While souls can be created or destroyed with sufficient magic, this is no where near common practice. Creation of a new soul from errant spiritual energy is both intensely difficult and intensely useless.
A soul can be damaged, but bringing a soul to the point of complete destruction rarely happens. When a soul is damaged, it loses a portion of its energy and, to magical senses, visibly shrinks inward to protect the core of awareness. Long before the core is compromised, a soul will slip beneath a critical point and lose its ability to remain within the body, resulting in the classic spirit death. A second threshold, also well before destruction of the soul, causes the soul to slip once again: this time from the Plane of Abiding to the Starry Road. Due to this, literal destruction of the soul by mortal hands requires a tremendous and immediate act of violence.
Death and the Soul:
Elanthians understand death as the point where the soul is permanently removed from the body. This can happen either due to extreme injury, so that the body no longer functions, or by injury to the soul to the point that it passes the first threshold mentioned above.
While isolated from a physical shell, the soul slowly bleeds off energy. This is even more detrimental than a normal spiritual attack, since after death the soul no longer has access to a brain to ground his experiences. With less and less energy to use, the personality simplifies and abandons greater portions of itself to maintain the core of awareness: in effect, memory loss.
Holy magic is best known for its ability to correct these problems. Rejuvenation assists in repairing the "mass" of the soul, while Soul Bonding and Resurrection focus on restoring the connection between the soul and the body.
When assistance is unavailable, the damage depends on how long the individual lets it go on. Every soul will eventually lose enough energy to slip past the second threshold, and doing so involves losing a significant chunk of the self. More commonly, the dead will resign themselves to their fate and willingly depart from this world with what identity they have left. At this point, they leave death behind and enter the afterlife.
The Afterlife:
Any unity among the religions breaks down here, as different pantheons express a variety of afterlife schemes. In the simplest terms, it can be said that the fate of a soul is firmly in the hands of the individual's gods, and what happens then depends on whatever system those gods have in mind.
At least to Eastern thought, the Immortals represent the default system of life and death. While other gods may exist and exert influence over a limited number of followers, the Immortals claim authority over all souls that are not otherwise out of circulation. In this system, a soul that departs the Plane of Abiding is said to walk the Starry Road. During this process, there are four potential fates.
The most common fate for adventurers is direct, bodily reincarnation. If an individual died before his time, he can expect to be reborn with a new body and however much self-identity survived his death. However, the rituals and compacts commonly invoked for the gods' favor do not ward against dying one final time at the end of the individual's lifespan. Greater secrets, including everlasting immortality, are said to be within the reach of the priests, but if so they are rarely practiced and jealously guarded.
The permanently dead experience one of three other fates, loosely tied into the Immortals' overarching metaphor of the Light, Dark, and Prime aspects.
The Light aspect of death is regarded as the most common, and priests assure it to even simple peasants who says their prayers and keeps their affairs in order. In this case, the soul passes into the Void and is wiped clean of identity without pain. The individual soul is purified and returns to the source of spiritual energy, becoming one with the substance of the gods.
While horrifying to those who prize their identities and sense of self, priests of the Immortals argue that this isn't actually a bad end. The center of awareness is never extinguished in this system: though memories and sins depart, the individual is aware of his experience as he is subsumed by the essence of divinity itself. Not a fate you walk away from, but transcendent and good all the same.
The Dark aspect of death is the Red Spiral that awaits the unrepentant and spiritually damaged. An evil soul is granted the same ultimate end as the pure, but must endure a spiritual crucible to burn the error out it first. The dissolution of personality is an unspeakably painful process which can take an arbitrary, perhaps even infinite, amount of time.
Some theologians argue that there is no actual distinction between these two ends. Instead, they propose that all souls walk the Red Spiral. Souls that are pure and free of burden find this process liberating, as the flaws that hounded them in life melt away before the moment of apotheosis. Souls that are deeply tainted, in contrast, experience the horror and pain of a great, bleeding chunk of their self-identity being scourged.
The Prime aspect of death is reserved for the greatest souls of their time. If an individual truly wins over the support of one of the Immortals, that Immortal may elect to keep him around. The individual is transformed into an enduring, spiritual being with his identity intact. In most cases they become the classically known spirit-helpers of that Immortal, but the archives of the Clerics' Guild are filled with orders and hierarchies of spirits that defy convention due to truly divine service or the patronage of multiple gods.
Other Afterlife Systems:
While most people in the Plane of Abiding face the three-fold path that the Immortals endorse, there are other belief systems in the world. Three are accepted by the Clerics' Guild as, while blasphemous and morally wrong, having a degree of spiritual validity.
The most commonly practiced alternative is the Wheel. The Prydaen pantheon offers spiritual reincarnation to its followers and, for what it's worth, those souls do seem to pass through death without walking the Starry Road. Beyond that, Eastern priests have no direct experience or observations to draw from.
A rarer system that sees sporadic practice has no formal name, but often goes by the regional dialect of "the Invisible Flame" or "Path of Invisible Strength." Most often practiced by Paladins, though it has adherents in many professions, the path proposes that a man of sufficient spiritual purity and strength can develop a self-empowering soul: one that can exist outside the body, with its identity intact, indefinitely. Where the common soul is weak and transitory unless fixed in its state by the gods, the soul of the great and wise men may endure forever.
Priests of all stripes denounce the pursuit of vain spiritualism over service and homage to the gods, but for every prayer there is a dozen ghost stories. It is commonly known that particularly driven or powerful individuals sometimes... hang around longer than even the wildest amounts of conventional spirit health should allow.
Finally, there is an antinomian magic called the Profane Aegis. Demons exist in the depths beyond the planar void and some of them have enough power to extend influence into the Plane of Abiding. In the right times and with the right rituals, they can act as localized "deities" for the purpose of claiming souls. For this reason, adventurers are often advised to fight to the death or even commit suicide rather than be captured by demon worshipers. If you're ritually sacrificed on a Maelshyvean altar, you might not see the Immortals on the other end.
The Profane Aegis is an artificial condition and can be "dismantled" with time and purification rites. Demon worshipers are in the same boat as adventurers when it comes to capture. Further, demons are regarded as more temperamental and malicious than even the dark aspects. Few people enjoy having their soul in the grasp of a creature that wants to consume all life, or who might rescind its favor just because it enjoys their momentary panic more than their continued existence.
No right-thinking individual does this to himself, leaving the average user of the Profane Aegis either insane or in intense denial. In particular, some Necromancers claim to practice a godless alchemy which produces the Profane Aegis without demonic aid, but priests have found no evidence to back up the claim. Surely, with the coming of Lyras, we have finally abandoned the pretense that Necromancers are anything more than the thralls of evil.
-Armifer
<Kvlt> Step 1: Want stuff! Step 2: Be ambitious! Step 3: Believe in the ability of your fellow man to carry you to heights you are too incompetent to reach alone.
