The most likely way I see it happening is that when you die, your soul goes to some sort of "waiting area". Now if you are a good little boy or girl and follow the light then you wait to be spun into the pattern. Now the big difference from the heaven and hell approach is that I think while the souls are waiting they are in a sort of inert state. They aren't really conscious of whats happening. Unlike the Heroes of the Horn who are closely tied to the pattern and live in T'A'R they don't necessarily keep the same personality so they wouldn't be sitting their chatting it up with each other or go around dancing with the creator or anything like that.

While I would imagine Darkfriends go to the same sort of waiting place to be spun out again, the Dark One is able to affect them due to the connection to him that is presumably made upon swearing to the DO. We have seen that the DO can use this connection to bring his most valuable followers back from the grave, so why not use it to take the souls of those who failed him from their waiting place and teach them a lesson? I couldn't really say exactly what the punishment entails, but you can use your imagination...