Creatures Wiki

In the first (July) issue of the Creatures newsletter, Cyberlife had this to say on the topic of afterlife:

Where do Norns go when they die?
We have had several enquiries asking where Norns go when they die. At CyberLife, we like to think that Norns go to Silicon Heaven when they pass away. That sounds much nicer than "they just go to the big recycle bin in the sky". In Silicon Heaven, Norns live in a world without disease or Grendels. They can eat as much as they like without having to worry about which plants are safe to eat, and the Still is always overflowing. They can never grow old and can kiss and breed as much as they like. Silicon Heaven is run on a Cray Super Computer, with 2.7GB of RAM. This is a far cry from Silicon Hell (which is where the Grendels go). In Silicon Hell, poor unfortunate creatures are made to suffer by being run on a 386 with 1MB of RAM. The moral of this is that you need to look after your Norns if you want them to have a good afterlife.

Of course, modern norn theologists have updated the specs of the Silicon Heaven machine to be more in line with current expectations. Silicon Hell remains the same.

Modern Silicon Heaven Estimates: 256GB of DDR3 Ram. Yes, that is realistic. Modern Silicon Hell Estimates: 64KB of RAM Ram.

There are also several theories from members of the Creatures Community at an archived page of Allana's Creatures.