* A return to party based adventuring based on latest or some next generation 3D engine

Yes, graphics in most RPG stink (to say it mildly). I know this aids in the networking of the game, and reduces the technical requirements for the PC... but they should be 3d games dumb-down to play on slower machines, not animated 2d cheesed up with a few 3d effects.

* Hit/health points suplemented (possibly replaced) by realistic damage modeling ie tears in armour - visible wounds & disease etc

Another good idea, having a gore option would eliminate any rating issues that this would incur.

* Likewise visible healing & repairs

Yes

* Full contact beat-em-up style combat complete with throws & special moves. A giant could pick your characters up one by one and throw them down the corridor... lol

That would be fun, but because of the 3d requirements, these scenes played on slower PCs would look like junk in lower res/texture detail.

* Massive continous gameworld with no load screens & a wider range of transportation ie horses - wagons etc

EQ has horses and such, they're much slower than druids though

* A party that can move together as a group in a realistic and convincing manner with 'dynamic set plays' instead of the usual 'fixed formations'

k

* Sneak-em-up thief skills climbing through windows on rooftops possibly with first person mode

k, maybe an assassin class? lol

* Crouched and prone ability for all characters to hide behind rocks or fallen trees so you can set up ambush situations

k, maybe an ambush class?

* Reduced inventory micro management. The characters could have better personalities and maybe argue/discuss amongst themselves to resolve the distribution of items

Yeah, it stunk sometimes being in a group enviro and not being the one doing the looting, always got the 'short-end'.