My daughter understands these are characters, not real people. She writes stories herself, mostly for school, and understands that "something has to happen." Yet the death of any character with more than half a paragraph of development will set her crying, and she'll have flashbacks for weeks. "Mommy, help me stop thinking about Frank!" she'll say in a panic, referring to a throw-away character in the first chapter of one of the Harry Potter books; and I had warned her in advance what was going to happen.
And yes, she is probably morally and empathically (though not physically) over-sensitive, but the real-life stuff she has a handle on. She is resilient in dealing with slights from classmates, for example. She is fairly good at challenging kids if she sees them being unfair to other kids. (With the side-effect that there is virtually no bullying in her grade, which is also still free of the mean-girl phenomenon, BTW.) It's the over-empathizing with well-drawn characters that is causing her so much distress.
Rumors are the kids will be assigned Bridge to Terabithia at the end of the year, and even though I've already told her the nature of the tragedy at the end of the book, I am afraid she will be devastated if she has to read it. I have read balanced mama's two related posts, and I can probably get her assigned another book if I have to, but will she have to avoid serious (and not-so-serious) literature for the rest of her life?
Update, 20 months later:
I never found a magic bullet. My daughter has gradually adjusted, though it has been painful for her, and her tolerance for character death remains lower than her peers'.
We went back to the Harry Potter books last summer/fall and finished all of them. At this time she was unhappy but resigned at minor "good guy" character deaths, and very sad about the deaths of the two major characters. For a few weeks afterwards she would mention how sad it was that they died, and we would talk about it, but she did not seem to need major help dealing with her feelings, as she had with Frank.
She got through Bridge to Terabithia with about the same amount of sadness, mainly because I told her what was coming. She did even better with Holes -- again I let her know what was coming -- and she handled The Giver without any warnings (other than a long discussion about dystopias/utopias), though we did need to talk about certain scenes afterwards.
I do believe reading together and deconstructing stories with her has helped. So does comforting her when she's sad.