Wow, first of all I must say that after 4 pages of this discussion, I commend all of you that have put forth the effort to come up with these mathmatically and scientifically correct methods of determining and communicating direction in a world set along a ring shaped terrain.
That being said, I agree with those that have expressed concern over these methods. They are entirely too complicated and confusing. Newcomers to Yliakum will not understand them and will abandon those directions (or worse, abandon the game) for more simple explanations.
I do understand the issues with only using directions based on NSEW, as they are overly simple and cause problems with movement (like when technically one town my be directly SW of another, only it happens to be on the opposite side of the ring!). NSEW still has its place on a small scale, such as within a town/region. I don't see the need, however, for going to the opposite extreme and introducing complicated coordinate systems.
Currently, most people (in RL and in-game) use landmarks for traveling between two places. "Go out the east gate and continue through the first canyon. Go up over the hill on your right and you will see a group of consumers. Just past them is the cave you are looking for." To me, and apparently many others, that is simple and works as it is very descriptive, even if a bit wordy. Accoring to the discussions here, the revised directions would be "Go out of the clockwise gate and head 200 meters. Turn edgeword for 112 meters and you will find the cave you seek.". That is much more complicated and is just about as wordy. I won't even go into what the description would look like using degrees and such nonesense.

I think that we should stick with NSEW when used on a small scale, such as a particular town or region, and then adopt the clockwise/counter-clockwise/wallward/edgewood when describing long distances.
I.E. In Hydlaa, Harnquist is just south of the plaza fountain, and the arena even further south of that. Ojaveda can be found about half way between the wall and edge, by leaving the east gate of Hydlaa and traveling in a clockwise direction.
Now of course these new directions would be greatly aided with a simple compass (magical or otherwise) that gives your location around the ring. It wouldn't need to tell you height, as you should know which level you are on by the terrain, people and other surroundings (not to mention that you travelled there!). One problem we face without the compass is that I have yet to see the edge of the level and look up/down into the level above/below. Also, I'm not sure that just because I come up against a great mountain that appears impassable, that I am actually at the "wall" of the current level. I'm sure the edgeward part of this is intentional by the devs as we don't currently have access to multiple levels, but the point still stands.
So for those of you who now think I don't know what I want

, here is the executive summary.
Keep NSEW for small scale (town, region) and use clockwise/counter-clockwise/edgeward/wallward for long distances between two points. The use of relative positions can still be used where appropriate and according to personal preference. Finally add a simple compass, in the shape of a ring (you can make it magical, polarized, magnetic, etc) that shows your current position, both around the ring and between the edge and the wall. The ring should still have a NSEW on it, otherwise you would be totally lost if you rotated the ring.

The compass would not need to, and in my opinion should not, show height, as distance around a ring and edgeward/wallward is all relative to the level you are on.
Just my two trias.