In my 10+ years of Multiuser online games I have seen every angle of players responses during down time.
I normally use this time to enrich my characters background but I am finding contributing to the game itself is more gratifying.
About the 'people will leave because of the down time'. I say let them go. This place drops a gold nugget in thier lap and they drop it becuase its too heavy. Darwin baby, darwin.
k-