This is an idea i have been toying with for a while:

( I don\'t know what shape your code is in, so forgive me if i mention ideas that you have had or allready implented.)

Bandwidth is a scarce resource so a model where many servers share the load would be of benefit.

One possible approach would be to divide the world into sectors. When an avatar then approaches a sector boundry the client would connect to the other server, maintain a link with both servers as long as he is in no mans land, and then terminate the connection with the previous server once its done.
The character information would be passed from server to server directly. So either a distributed database would have to exist, or all servers communicate with a single db server. If a server crashed or gets disconnected another server could take over that sector and drop in all the avatars at predefined spawn points throughout the sector. That way the people could keep playing.
The client would connect to a

The other approach would be one similar to IRC. Several servers support several players. As soon as one player comes near another but are on different servers, the location data of the two will be exchanged continously.

A couple of additional mind snipplets:

Adaptive Location Update Rate - as soon as players come near each other the update rate increases up to realtime once they see each other.

Fixed Location Rate - Once things get crowded it will be difficult to update each and every player. So a max ammount of updates will be distributed amongst the avatars in the immidiate presence of the player. That way the link of the player and server will not be crowded.

Thats all for the moment.. hope my mind rants are of more worth then the diskspace and bandwidth they occupy.