If a pokemon stays in its pokeball, it remains as energy and can basically live forever. That's one way they can live and not die.
If they were outside a pokeball, they would die like any living creature would. This could be due to old age, sickness, hunger, etc.

Come on. Pokemon aren't immortals, they die sometime. Whenever a foreigner to the show ask this question, 99% of the time they're referring to battles. Otherwise, yeah, Pokemon die. Get realistic, they're not the undead.

Pokemon shrink when they go into thier pokeballs not become energy. This has been shown on the show too.

Again I say, it has been shown on the show that they shrink when they go into the ball and when they come out they go back to normal size.

Has everyone forgot the episode from season 1 that was ALL about a pokemon dying? Butterfree died, how could anyone forget that?

America edited the episode to make it look like Butterfree was just leaving but we all know what actually happened.

Butterfree didn't die, even in the Japanese version

Butterfree didn't die! And as for the red light thing a pokemon turns into I think it turns into energy or something that would be in physics.. Hey someone should question that at school. Ha! another way to annoy teachers!!!

Thank you! At least somebody agrees with me in some form!
So tell me then, what episode showed the Pokemon be minimized?

Here. I'll show you something from Answers.com that supports what I say!

"In the Pokémon world, scientists have been using various, highly developed techniques of converting mass into energy and back for years. The Poké Ball is a genuine example of the practice of this technique. When a Poké Ball is thrown at a Pokémon and comes into contact with it, the ball jumps open. The Pokémon is then converted entirely into pure energy, which shows as a bulk of dim red light, and sucked inside. The ball closes automatically after this process. The Pokémon will likely struggle, trying to break free. If the Pokémon has been sufficiently weakened in battle and/or the Poké Ball model is sufficiently strong, the Pokémon is captured and henceforth can only be stored in that Poké Ball. If the Pokémon breaks free, the Poké Ball is destroyed/used up in the games or, in the case of the television series, rebounds to the trainer and can presumably be used again.

Humans can not be caught with Poké Balls, but inanimate objects such as doughnuts, rocks, etc. can be caught in a Poké Ball; this device was used to humorous effect in an early episode in the animé. However it has not been mentioned again."

pokemon live more than humans, some pokemon live more than others (dragon pokemon, ninetails, ghost pokemon, etc) legendary's are inmortal, the pokeball makes pokemon into energy, pokemon can resist more pain than humans, ash is doing more exercise by adding weigh in his shoulder (he caught an aipom)

I think it was the episode when Misty first caught Psyduck, "Hypno's Naptime" maybe?