I always thought it meant someone dies during the course of the story and that the death is unexpected -- because that's the part that seems to make people upset. *scratches head* For example, Abby's Salvation & Sacrament (gorgeous fic, btw) starts with Harry's death and then tells the story of the events that lead up to it. So the whole time, you already know he's dead -- but that one doesn't have a CD warning.

I'm terrible at warning people, though. I tend not to, if I can get away with it! :-P

And it occurs to me that if someone hadn't read those fics, they would find my previous comment really confusing! ;-)