When it comes to elite Diablo players, hardcore mode has always been the place to be. No other mode, no matter how hard it is, will offer the same thrill and challenge as Hardcore mode.

Why? Simple.
Diablo 3 Hardcore has permanent death! That's right, characters are mortal and once they die they are gone forever.
This mode requires the player to have beaten softcore on any difficulty to unlock, as stated by Blizzard:
Yes, you will have to play through to a certain point to unlock hardcore mode, I think it’s through normal difficulty after you kill the end boss. I’m like 90% sure, so we could change our minds.
Some things to note about Diablo 3 Hardcore mode:
- Seperate Auction House for softcore and hardcore players
- Only gold Auction House is available (as stated in our previous Diablo 3 Auction House article)
- Players can still trade items with each other like in Diablo 2

On death, your items don't drop on the ground so you can forget about having a friend tag along to pick them up and return them later. Items in your shares stash are not lost however.
On character death, an entry is added to the Halls of the Dead in your account.
PvP in Diablo 3 Hardcore has been debated for over 2 years as to whether players should perma-die in the arena or not. The argument is that if players perma-die in the arena, it will loose it's scope as the arena is meant for fast action and plenty of deaths. Also many players would just avoid pvp. The other side of the argument is that having perma-death in the arena makes for more thrilling pvp.

In the end, Blizzard decided that there will be no perma-death in the arena, as stated in this quote:
Wyatt Cheng: Our current position is that you don’t die in Diablo PvP in Diablo Hardcore mode. So what happened in Diablo II is that anyone who wanted to do Hardcore PvP would basically level a character to level 10, and then they’d find another level 10 character, and they’d fight and one would die. That’s just not really that interesting. So we’re just going to let players engage in PvP.
It is yet unknown if there will be an optional perma-death arena, but the default/only option will be no perma-death.