the loss of insight and decreased ability to make decisions must always be balanced against preservation of patient autonomy 
important issues requiring decisions include: informed consent and decision making in care and medical management, participation in research trials, end of life decisions etc. 
always use standardized tools for the assessment of patient capacity and competency
the wishes of the person with dementia should be respected and guide all end of life care decisions
The Alzheimer Society of Canada publishes an excellent resource called "Tough Issues" which deals with many of these difficult issues and more information can be found on their website
3. Patterson CJS, Gauthier S, Bergman H, Cohen CA, Feightner JW, Feldman H, Hogan DB. The recognition, assessment and management of dementing disorders: conclusions from the Canadian Consensus Conference on Dementia. Canadian Medical Association Journal 1999; 160 Suppl 12:S1-15.