What I'm thinking is this:
- Falling characters take 1d6 damage per 10' per 10' fallen — i.e. 1d6 for the first 10', plus 2d6 for the second 10', plus 3d6 for the third, and so on — up to a maximum of 20d6 (terminal velocity).
- Falling (or fallen) characters are concussed for one Turn per point of damage over their level. They will be seeing double, will probably puke if they attempt any vigorous activity (or even no activity), and all their die rolls will be at minus 1 per Turn of concussion remaining. For example, a level 5 character who takes 10 points of falling damage will be concussed for 5 Turns, and will be at -5 to everything the first Turn, at -4 the second, -3 the next, and so on.
- A character who takes more falling damage than their level plus CON score is knocked out; the duration of unconsciousness is up to the DM, but when they wake up they will be concussed (as above) for at least a day.
Hopefully this will make falling dangerous enough to make players wary of suffering it, but not so dangerous the campaign will be littered with more broken and splattered corpses than is fun.
I'm tempted to allow a saving throw to halve falling damage, just because I think almost anything should allow some chance at mitigation. If so, I'd probably make the save at -1 per die of damage taken after the first, or something like that. Or maybe you get to knock off one die of damage for every point you make the save by... that might be better than a flat halving.
*His name was Smirnoff. He was one of my very first D&D characters, and had practically no skills except taking damage and dishing it out in vast amounts.