I reserrected my fighter and he has lost over half of his experience... but he is still at level 4, the level he died at. My question is will he still gain levels with my other characters or will he have to get all that experience back before he can gain another level?

I believe you just have to start over from the beginning of level 4, whatever that experience amount that is. I'd rather not deal with death penalties. So I start a battle over if a character dies.

well it sent my expereince down to below level four for some reason, thats what I found so odd. You answered my question though, I have to keep my whole party alive through each encounter.