Yeah, they die, but they will live again. If it were not for Christ, death would be final.
From the LDS perspective, and probably from the perspective of some other Christians as well, there are two things which are referred to as "death": Physical death and spiritual death.
(1) Physical death is the separation of the physical body and the spirit which gives it life. It is not a result of sin. It's a result of being mortal. Jesus' Atonement guarantees that all who have ever lived with live again.
(2) Spiritual death is the separation of man from God, an estrangement. It comes about only as a result of sin. Jesus' Atonement makes it possible for us to be reconciled to God without having to bear the consequences for our sins.
I disagree. It has everything to do with God in my opinion. But that requires some explaining. To me, sin is the intentional transgression of a religious law or moral principle. If a Mormon has a drink of wine, this is a sin because Mormons are of the understanding that God has commanded us not to drink alcoholic beverages. You, on the other hand, could have a drink of wine and it would not be a sin because you would not be acting in disobedience to something you believed was wrong. On the other hand, if you were to sin against me, it would have to be by acting in some way which you recognized as wrong. If you stole from me, for instance, you would probably recognize that you had violated a principle your conscience told you was wrong. Whether you believe in God or not, when you sinned against me, you would have also sinned against God, since He is offended by the way you treated me. That may or not make sense to you, but I can assure you that once you have kids, and somebody bullies one of them, you will be offended by their bullying and you will not be able to tell youself that because the bully beat your kid up and not you, it's okay.