is his character dead on lost now?

they were supposed to be iconic and I can't see how.

Agreed. I was pretty frustrated at the end of the episode, because the whole thing just seemed so pointless. I'm not sure why they even bothered to introduce Paulo and Nikki in the first place. Does being buried alive equal being "iconic"? Hopefully there'll be some kind of flashbacks or more explanation later on in the show about whatever it was that was supposed to make them significant.
Here's an interesting article on ew.com:The producers are working very hard to keep the fans who are still watching satisfied and tuned in. That's why they (literally) buried Kiele Sanchez and Rodrigo Santoro's unpopular newcomers, Nikki and Paulo. Originally, the diamond-swiping crooks were to have anchored a winking arc of stories; one twist-ending episode would have devoted its flashback to actress Nikki's cheeky TV show, Exposé, about strippers who solve crimes. But faced with mounting disdain toward the abruptly introduced characters — and ramped-up viewer frustration with the show's aggressively enigmatic storytelling — the producers decided in December to telescope their ideas into a single kiss-off episode. ''Back when we had more good faith with the audience, we could have gotten away with these shenanigans. Given the backlash against them, we had to clean up the mess,'' says Lindelof. "We're now judged on an episode-by-episode basis. There's not a lot of room for error."
Looks like they had bigger plans, but finally realized they are losing viewers and pissing off fans, they decided to just off them sooner, and abandoned whatever storyline that would have made them iconic.

Here's the link: http://www.ew.com/ew/article/0,,20034817,00.html.

______
airfarewatchdog.com Unadvertised airfare wars people don’t know! It's free!