The Mercy system sounds fantastic, i wonder if we could develop it so you can choose to have your last few attacks weak on purpose as to not get a murder count. The trade off would be that your opponent could use full strength attacks while you just try to knock him unconcious.
I was kind of hoping for directional attacks, which I didn't see any mention of. Which makes me wonder what the generic attack direction is when you hold LMB. I know directional attacking might be real hard in an MMO, but I'm kind of hoping you forgot to add that you can charge attacks in some different directions

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Archimagus,
I'm not sure you will have to spend points in PvE magic versus spending them in PvP magic, though we don't know yet. I took the magic system just as some spells are used for PvP and others for PvE. Which I like because it allows for a complex system of PvE spells to be developed while keeping PvP combat "relatively" simple so that it just doesn't become luck based (oo, glad I casted flamebolt 10 instead of ice lance 9).
Kudos!! I'm sure there will be some more great discussions on this.