Aborted escrow transaction I know that multisig (n of i) transactions provide a decentralised escrow mechanism. Let's say we have a 2 of 3 address. What happens if funds are sent to the multi-sig address and say the seller is hit by a bus before posting the adorable Hello Kitty™ mug that you bought?

Does the 3rd party simply sign a transaction returning the coins to the buyer?

What about the general case of an address where n == i? Are the coins lost?
What happens if funds are sent to the multi-sig address and say the seller is hit by a bus before posting the adorable Hello Kitty™ mug that you bought?
Does the 3rd party simply sign a transaction returning the coins to the buyer?

Yes, if your address has a public key for 3 users, and you have problems receiving your goods, you can ask the arbitrator to sign review the situation and maybe create a transaction which pays you the money in the address. You sign, he signs, you get a refund. It's at the whim of the arbitrator.

What about the general case of an address where n == i? Are the coins lost?

Yes, if anyone loses their key, and the address requires same number of sigs as public keys, you cannot recover the funds.