Mutant Future solves these problems easily, as character generation is not only fast but incredibly fun, and the difference in power between a 1st level character and a higher level character is quite small; indeed, with some lucky mutation rolls, a 1st level character could even be more powerful than a higher level character. Still, I was a little nervous to see how the players reacted to the deaths of their first Mutant Future characters.
In short, they took it very well. Danny and Sean are both rolling up new characters for next session and don't seem terribly shaken up by this turn of events. As the deaths occurred towards the end of our last session, Sean took the opportunity to go outside and smoke a cigarette, while Danny took over an NPC character, a commando from the past who had just been revived from her cryogenic slumber by the PCs.
One cool thing that happened is that another player instantly sprang to his feet, grabbed the dead characters' character sheets, and pinned them to the wall above the game table.
"They are up in Valhalla now," he proclaimed. Everyone looked up at the sheets and smiled, perhaps thinking about what other brave characters might end up on the wall of dead heroes before it was all said and done.