OK, I've got 3 reccomentations.
Why stop with 1 virtual nation? How about starting out with several, and allowing groups of people to form their own, with governments, economies, etc. Then you could have government coups, wars between nations, elections, election scandals (hanging chads, anyone?), and all sorts of fun stuff.
You could also set up NPCs that "swap out" with player characters. For example: That shopkeeper you met in [Insert City Name Here] wants to quit his job and see the world, and asks you to run the shop in his place. You could then run the shop (setting prices, buying inventory, etc.) until you're bored and give it to someone else.
Lastly, you should set up a bounty-hunting system to combat PKing. For example, let's say our little newbie gets himself killed by a PKer. The newbie goes to the bounty-hunter's guild and puts up a small reward for the jerk who killed him. A bounty-hunter player character checks the bounties and goes on a quest after the PKer.
It'd be tough to program, but possible.
Just my thoughts, Underhill
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