First I should mention that I have been dead twice; and remember it well. Secondly I have seen the dead in their everyday existence, as I see spirits from time to time. I bring this up to point out that things I'm saying are more than me just speculating.
A point I would like to raise at the beginning is that those left behind should try and consider the feelings of the person who has passed on. This person is still present. They haven't actually gone anywhere (I have discussed this point before, and it can be read on my "Obscure Doctrines" site - the link is at the top of the page). Their spirit is watching and listening.
Now consider how you would feel if you had passed on and everyone is absolutely miserable? What is more, they are ignoring your presence altogether. They are not listening to you trying to comfort them that you are OK.
So for those who have had someone pass on, just keep that thought in mind too.
As LDS we can tend to be philosophical about death, and just accept it as part of the eternal plan. While this understanding is a huge advantage, it still is difficult when we are faced with the passing of a loved one, or are called upon to comfort those who have.
Some left behind attempt to find some justice in the death. They see death as some ultimate penalty (after all it is given as such in scripture and in some justice systems). Therefore they search to understand what the deceased did wrong, in disbelief that they were that bad. They may tend to blame God for some injustice, in having allowed this person to die. Yet all LDS should be aware that it is just an inevitable step in God's plan, that happens to all at some point. Heavenly Father knows the best time for this to occur in each individual's life. He has taken this into account for each individual he places in any situation (before birth).
We are all different, and therefore require different lessons in life. Heavenly Father seeks to provide the lessons that each person needs for that individual to achieve their highest potential. And some of that experience will be provided in the spirit world, in the vast majority of cases.
We came here to earth to get a physical body. Obviously upon death we will miss that extra thing we have got used to having and went to all this trouble to get.
"For the dead had looked upon the long absence of their spirits from their bodies as a bondage." D&C 138:50
Fortunately Jesus Christ came and made resurrection available to all. And that is what I look forward to; along with going home (to Heavenly Father) upon being resurrected.
The dead have the same situation we have in that they are here: Their lives are normal. Spirit Prison, Hell and Paradise are all mental states, not areas. And missionary work there is by members as much as missionaries (or should be - as here).
When I was working as a night-patrolman for a security firm I was assigned a place we referred to as "the Wool Sheds" (as part of my area). We had to enter the sheds and walk through them and check various areas. Those who had done this place made mention of the fact of it being haunted: They could feel the presence of something other than themselves. One adamantly denied the existence of a God but said, "you know you are not alone in the Wool Sheds."
I could feel them also. One night I looked and saw many spirits standing around talking. These were those who had worked at the sheds during the over a century it had been there for. Their clothes demonstrated their eras. Some on one side saw me coming and eagerly came over to try and scare me. The rest over that side just took vague notice of this situation and went on with their various conversations or just watched me.
My experience only contributes to the enormous amount of sittings of the dead that so many others have also experienced. The only reason I mention it is that it was obvious from the experience that these people were neither in fire (and, obviously, the ones coming to scare me didn't have good intent) and that there were no prison walls or bars: People interact freely, as here.
General Authorities have pointed out that the generation now living will be there for Christ's second coming. I would add my testimony to that which I have also received through the Spirit. Therefore we live in a fortunate time in that the resurrection of the righteous will soon be upon us. Even those righteous dying now will have little time to spend without their bodies. All the Celestials and Terrestial dead will be resurrected. I certainly look forward to this.
It will be a great thing to see our friends and relatives who are now in the spirit state.