From currently available information, it appears Mo was killed in a firefight, while recording.
Mo created and operated the widely-viewed live video channel Al Hurra TV on Livestream, broadcasting raw footage and commentary from Benghazi, Libya.
Mohammad Nabbous was my primary contact in Libya, and the face of Libyan citizen journalism. And now he's dead, killed in a firefight. A few hours ago he went out to record some more audio and was caught in a firefight. [Link]. Audio stops 6:30 into it. For several hours we heard rumors that he had been shot but we didn't want to say anything until we knew for sure. And now I can't stop thinking, what if those French planes began to arrive 12 hours ago. Would Mo be alive now? I just don't know.
Nabbous' wife, speaking on his Livestream channel earlier:
I need everyone to do as much as they can for this cause. They are still shooting. More people will die. Don't let Mo's life go in vain.
Those last two links via Bilal at Al Jazeera, who writes: "Remember Mohammed Nabbous, known to all as Mo. His mission: to get the news about what's happening in #Libya out to the world." Bilal created a tribute to Mo here.