I think the fundamental difference between an NPC and a monster is their purpose.
The basic purpose of an NPC is to give life to the world, inhabit the towns and cities and keep the story and adventure flowing. You can interact with them, hire them as henchmen perhaps, do them favours, barter with them and so on.
Monsters, however, are for the dungeons and wildlands of the world. Most commonly agressive, there\'s not much interaction possible. They may have hides or teeth or some other ingredient you need to complete a quest or for alchemy purposes. Otherwise, they are mainly there to be bashed over the head with [insert choice weapon type here] to gain XP.
As PCs, or Playable Characters, we control our own adventures and live our own lives in the game. Non Playable Characters do the same, except they are entirely controlled by their AI scripting. NPCs would have their own homes, their own jobs, their own conversational topics. Of course, in a MMORPG, making them killable would be a bad idea. Simply allowing that and respawning in a couple of minutes like a crystal wouldn\'t go down well in a world which is supposed to be as believable as possible- moreso if they respawn with all their loot back (after the player has taken it all from the corpse).
On the other hand, monsters should respawn frequently, considering their primary goal is to die at the PCs\' hands.
Hmm... I\'ve run out of steam for this post. Still, that\'s what I think about it.
