You cannot be killed by anything other than a player so far. You get down to one HP, and can no longer fight until you get to at least 2 HP. Creatures drop nothing, but bandits have a five percent chance of dropping something they had in their fittout.
XP is given out on a shots-hit basis. Therefore, because it takes more shots to kill a larger creature, you will end up receiving more XP for killing it. For instance, killing a Kryat Dragon will take you tons of shots, while killing a physalis berry monster would only take a handful. 40 XP is the max for hitting with all your shots. If you have a weapon that shoots between 0 and 10 shots, you will probably get less XP than if it has 0 to 5 shots. Of course, that's not always true, but in general, that's how I believe it works.
How many blasters would a blaster blast if a blaster could blast blasters?