Sauron's Spirit Inside the Ring

[slippolives]

I like to think that the the eye of Sauron is somehow him using the palantir’s power, and augmenting it to be an intrument where he can find and spy and communicate. That is, the eye.. the eye of Sauron, is actually the palantir of Minas Ithil that he posseses. He took that elven technology and perverted it, expanded it, and made it part of himself.

[Metus_of_Morgul]

as I got all the ring thing...it was like an horcrux to Sauron...in the later days after he failed to dominate the minds of the elves and dwarfs...etc,etc...

[Lefty Scaevola]

See "Morgoths Ring" in HoME for Morgoths use and storage of power/creative energy/lifeforce analogous to Suron's use with the ring. The Aniur seem to have a fixed or only partialy renewable amount of "Power" to begin with. They use it up as the create things or do certain things, such as creating Arda. They literally put portions of their existence into what they create and thus tend toward diminishing power as they go foward with their tasks. (Also their freedom of will/choice seems to become more limited as times passes and more history become fixed, locking them closer to prophecy/The Music). Making a physical body appears to be a significant expenditure of their resource, but also appears to be important for then to use in exercising some of their power (otherwise, why do it?), and they lose a signicant amount when their body is destroyed.
They can also seem to make certain of their creations a storage of such power for them to draw on later. In Morgoths case, he made veins of metalic substance under his domains in Middle Earth, and before the Valar finally defeated him at the end of the war of wrath, they had to did up and disperse these veins of power, which is a cause of the Beleriand falling apart and sinking into the sea.
Sauron's ring was more sophiticated, not only providing a major safe storage on Sauron's existance and power, but also allowed him to more easily and subtlely dominate/infuence wills without expending a portion of his power as Morgoth had do to directly control his slaves actions (which was the a major casue of his diminshment before his defeat).

Related to this is how the Valar could not heal a lot of Melkor's evil in Arda, because he was a generalist who took part in the creation of so much of Arda, and thus bits of his existance were spread throughout the world.

[EllethValatari]

Originally Posted by Varda

So was Sauron ultimately dead? or after the 3rd age was over, was it possible that he was still there in other forms?

When I had finished the books a couple years ago I had the same question. Blackheart I think is right on. In addition I think that as Morgoth and Sauron's power was again overcome, it could only "reincarnate" to an extent. After the ring was destroyed, there was no power left to create a material form.