Alincor brought up the idea of instancing in MUDs.  While instancing works well for a very popular MMO like WoW, I'm not sold on the idea for even the most popular of MUDs.  At worst, instancing can mask the presence of bots, since players can essentially hide from the general population during their botting.  At best, for large-party RAIDs and whatnot, there generally aren't enough people online at the same time to necessitate instances for more than one party.

Should a new MUD manage to attain 1000+ concurrent players, and doesn't have a big enough world to spread them out, then ya maybe instancing is the solution.  Maybe instancing allows the game to have fewer but more interesting, deep, party-interactive areas while solving problems of multiple groups fighting over the content.

Either way, I don't think we have any hard limitations in the platform that would prevent area-instancing with a bit of extra work;  For instance, if say, a room instance is what determines how/when a mob spawns in that room, then we don't have to make the spawning code track down all instances of the mobile's target room while trying to determine if it shoudl spawn, etc.  I think slating the idea of area instancing to v1.1+ would be a good idea though.