I find it hilarious that you brought this up right after you posted about the exact opposite: a much more lethal campaign.
In my opinion, the most important thing to do is define how this works as consistently as you can. You have to figure out who gets resurrected, if not everyone, and how they get resurrected (where, with which changes, if any, and with which objects still in their possession). My thoughts:
- You don't want this thing to bring back everyone, since you don't want every villain of the campaign to be recurring, especially if the respawn rate isn't very long (which it shouldn't be, so that characters get back into the action quickly). The easiest way I can think of is that the artifact only brings good-aligned beings back from the dead. Depending on interpretation, this could make the artifact incredibly evil (since it prevents the afterlife which, in most D&D settings, indisputably exists), or incredibly good (because it denies immortality only to evil), so the party may have to either defend it, destroy it, or choose a side (since, like I said, the merits of the artifact are ambiguous).
- Another way this might work is that, instead of there being some kind of artifact, someone in the campaign works out a ritual that prevents death. The party is privy to it, but it's secret, and keeping it that way could be an interesting way to keep the story moving forward. Random encounters won't respawn, but perhaps a recurring villain gets her hands on the secret, and now the party has to figure out how to stop an immortal adversary. Perhaps the fact that only the party (and maybe a few others) are immortal will cause society to turn against them and try to force the secret out of them.
- As for the respawn point, rather than have it be random each time, I'd suggest it always be the same place, but unique to each person. This keeps there from being conflicts at a single respawn point, and also keeps the party from having to track down their fallen member after every death. I just feel like stopping the plot for the sake of finding the missing party member after every death just slows things down. This method also gives a definite way of stopping the recurring villain from the previous bullet: find her respawn point and fill it with lava or something.
- You have to work out how harsh you want this mechanic to be. At its easiest, it's infinite lives, which is nice in a laid-back, story-driven campaign. I'm in a campaign right now where all that happens when we die is we lose some 5,000 gp, because some smart Cleric found a way to bring us back for that much, and that's tons of fun and doesn't ruin the drama of the campaign or anything. At its hardest, this mechanic can be a serious curse. Rather than the relative ease of bringing in new characters, this can condemn characters to change their plans in response to every character death, just like in the quote you posted. I could see either one working well, though I think that the first option is a bit easier to make fun.
I dunno, those are just my first reactions.