Have both lost their lives, really, for good. The Magister at the hands of the King, who as we've seen has contempt for the Magister's devotion to some higher authority. Sookie and Bill do Lorena in, but in a sense that final death is due to the King, too, since he's the one who ordered Lorena to kill Bill, which instead resulted in her own death.
Bill survives because Sookie gives him a huge amount of her blood, first voluntarily, then because Bill as he comes back from the brink of death is ravenous, with an uncontrollable need to feed. This in turn puts Sookie on the doorstep of death. But as she sinks in a coma in the hospital, and almost into a pool of blissful dearth in her vision, Bill shows up and givesher a massive dose of his regenerated blood in return. Sookie comes to screaming - at Bill or her near death, it's hard to say.
Bill's big intake of Sookie's blood may have changed him - he's still a vampire, but he seems to be more resistant to the lethal sun. Whether Sookie's close encounter with death will change her is not yet known, but the strange folk on the show are increasingly interested in what kind of being she actually is, and the nature of her powers. Her cousin may have part of the answer.
The King is crucially interested, and there's little to stop him now other than Eric, who has the advantage of the King not knowing anything about his past - that the King killed Eric's father - since Eric was not yet a vampire when that happened. So Eric has the element of surprise working, but the King clearly has superior strength - indeed, he seems stronger than anyone.
Tara may or may not realize that she'll be in for a surprise - she bashed in Mott's head, but she's learned, witnessing Lorena's death and Bill's non-death, just what happens to vampires when they die...
See also: True Blood 3.1: Oxygen vs. Phone ... True Blood 3.2: King and Wolves ... True Blood 3.3: Rolling Eyes and Spinning Heads ... True Blood 3.4: Running Hot, Winning Names ... True Blood 3.5: Square, Love, Crown, Power ... True Blood 3.6: True Life and Death
See also from Season 2 True Blood Pours Back In and Love and True Blood in the Air and Likes Coming Together in True Blood and True Blood Boiling and Godric, Eric, and Sookie on the Roof and Maryann vs. the Good in True Blood and Illusion, Eisenhower, and Texting and True Blood Season 2 Finale
See also from Season 1 True Blood Calling ... Penultimate True Blood ... Last Bite of the Season
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The Plot to Save Socrates
"a Da Vinci-esque thriller" - New York Daily News
"Sierra Waters is sexy as hell" - curled up with a good book