Sephiroth won't die as long as the Jenova cells and the darkness in Cloud's heart are still hanging around.
Been playing KH, much? *rolls eyes*
Anyways, on personal thought, Sephiroth is no different to the generic boss you fight in every RPG. In storyline, he does die. FFVII saw to that, and the only reason he returned in FFVII: AC was because of
Jenova's head
I never really liked Sephiroth, because he seemed to be too much of a generic main enemy. He had a pretty unoriginal goal, too.
ANYWAYS, straying from the point, which is that Sephiroth doesn't live forever.