I've never played Ultima online so I'm just going off on what I've heard. This is a medieval fantasy type mmo I'm going to be talking about.
It would be UO/Wow mixed/eve online systems (no sci stuff)/thrown in a bit of age of conan for sex etc

Non cartooney graphics.
Communicate with other factions.
Player factions.
Personal housing.
Dynamically created worlds, the game would just keep expanding itself.
Dynamically created dungeons, no single dungeon would be the same.
Proper weather which in turn affects abilities.
Better items would be EXTREMELY rare and would require a lot of dedication to acquire.
Monetary system would have value against real world currency.
Ability to steal items from players corpses and pickpocket people.
In game bounty system.
Reputation system which would prevent you from going into NPC based towns etc.
Player death would inflict some kind of penalty such as losing experience or levels.
I can't really think of a solution that would do away with leveling unless levels are abolished altogether which would mean it would depend on gear and player skill. I'm not sure if that's a good thing, maybe.
Proper blood and gore.
There would be a story based long running piece of content a player could go through on their own or as a group (difficulty and rewards would scale) but they won't be held by the hand. There would be variations of the story line progression. For example you would find an item which when properly appraised or used by a specific class would start a quest. This would give you something to do and would activate the pre requisite for the next part in the chain. HOWEVER to start the next part it would not be clear. You may find someone in a random dungeon or out in the world that asks you to do something trivial which would then expand etc. Again the next step would be random so no guides can be followed, it could even be dynamically created somehow.
This is how I would envisage playing. I would be part of a blood thirsty alliance with a couple of people. We would have our own base hidden out in the wilds which could only be found if you knew where it was and had the correct spell to dispel the illusion.
We would rob and kill people making a name for ourselves. This would give us high bounties and low reputation. We would be feared.
The rest of it would play out a bit like eve online I guess.
A sci fi one would be awesome too, it would incorporate pretty much all of the above but we would land on any planet and each planet could be a player base for a player made or npc faction. There would be space wars etc and dynamically created content in space such as ruins, alien factions etc.
I can't wait until proper virtual reality truely exists. It also worries me at the same time, would we become addicted to the mmo experience in turn ditching our real lives?
Gah I didn't read the OP, even if it is a joke thread my post still stands. GIVE ME A DECENT MMO!