Once you realize that the act of dying in Dark Souls is actually just another part of the gameplay it makes dying not a big deal. Every time you die you should be learning something that you can use on your next attempt. The game is completely fair so if you do die then 99% of the time it was your fault. Typically you immediately realize what you did wrong and use this to your advantage the next time.
Here's a tip which I learned the hard way. Since you die a lot in this game, don't put yourself into risky situations when you have a lot of souls on the line. ie. Avoid areas that you have not explored yet, avoid areas where you know there are challenging enemies, etc. Spend those souls before pushing forward because you don't want to lose souls that you spent hours acquiring.
Last night I found myself tiptoeing through Darkroot Garden trying to get back to my bloodstain where I had previously died while carrying 25k souls. My heart was beating faster and I was so nervous that I would die before recovering the souls. It also didn't help that it was my first time exploring the area. Anyway, I eventually recovered the souls and while doing so, I aggroed a difficult enemy which came charging toward me. I freaked out and immediately used a Homeward Bone to warp me back to my bonfire. What a relief that was.
I've noticed some really bad framerate drops in New Londo Ruins and walking through the Darkroot Garden, and a bit when fighting Sif (probably due to the fur effects). I don't have a slim model XBox, I have the original model. It is really starting to affect my gameplay as there is noticeable lag when fighting enemies in the New Londo and Darkroot. I'm kind of disappointed but I'm trying to not let it ruin my Dark Souls experience because I love the game. The 360 is starting to show it's age methinks.