Dead as a doornail, or else the whole ending is completely moot and stupid.
That doesn't mean the franchise won't continue-- in addition to all the manga one-shot anthologies they've got Nightmare of Nunnally and Suzaku of the Counter-Attack (and if either proves popular they could always animate it).
Considering the series' popularity, I wouldn't even be surprised if they ended up making some new anime that takes place in the same universe but much later or much earlier, sort of a la Gundam.
I would like him to be alive.. beeing able to live in the world he died to create in some small house in some remote place.. aaah :'D. But I think he's dead.. wich is the byuty of it. It was long since I last became so emotionaly engaged in the ending of an anime and part of that is cause he really did die.. spent the entire night after having seen the last ep thinking about some sorta senario when everyone breakes down and cries after cc or someone tell a few select from the main cast about lulus true intentions and stuff... aahhh.. I loved this anime. ^^
You should put a spoiler tag in the topic name. Anyway, he is dead, but that doesn't mean they can't do something else with Code Geass, like animating Suzaku of the Counterattack or Nightmare of Nunnally.
I except that they insist on him being dead so they don't have to do another clusterfuck sequel. At least this way, if they continue the series in some way, they can try to do it in a manner that leaves them with some breathing room.