This would definitly bring more of a variaty to the series. It was only lightly touched upon in CV64/LoD and unfortunately you didn't have any power upgrades if you were bitten.
Anyways, and when you die, they should show your character {male or female} turning into whatever killed you and hear Dracula's laugh in the Game OVER scene.
Not everything that bites you, killes you. If you were bitten by a lychan then you'd simply become one without dying. But it's true that zombies, ghouls, vampires, etc. who infect you will eventually lead to your death--and rebirth as something else.
-X