tankerkiller125 I agree with disallowing suspended users from logging in at all. Plus having a suspended badge visible to the public. At least that's how it is most suitable for my case...
In any case, suspended users shouldn't appear as regular online users.
EDIT: It's funny that a suspended user might not notice that he is suspended as there is no possible way to know other than a notification which, in some cases, might not be viewed. This will cause some kind of confusion for the user, finding himself unable to interact with the community.