One of the repetitive concerns in the forum is that avatars cause lag. Of course they cause lag! For every avatar that you add to the sim, the sim has to calculate the PoV for that avatar and send all objects/textures to them on a constant basis. And from what I've been reading, it appears to me that each sim is a single process.
Obviously, a second problem is bandwidth. With each avatar taking as much as 1Mb/sec off the server, you need a gigabit switch to handle the traffic (perhaps you're already there). At 100Mb/sec, I understand why we have the current 100 avatar limit (Extreme Casino works fine at 4 fps (*grin*). He really pushes his sim).
Perhaps what needs to be looked into is a multi-threaded approach to sim updates (You know, where it says updates/sec)) that will allow for multiple threads, on a multi-processor machine, accessing shared memory, to process the avatar updates cycle.
The programming behind this, of course, would require a lot of work, but the payoff would be fantastic.
With the Cell processor that IBM is putting out, the advantages of multi-processor processing will be seen in newer game systems, such as the Sony PS3. But that's not going to be its only use. With a cell type setup, and multithreaded update applications, the sim capacity of your sim may be able to be linked to how many CPU's you're willing to pay for in your sim.
Recently, LL put out low-prim servers for large whitespace areas. How about a HIGH-prim server with multiple CPUs dedicated to a single sim?
If the update cycles are done correctly, a parent process could hand out the updates/sec to child processes that take 1/give 1 until the cycle is complete, and then continue on with the next part of the cycle, scripts, etc.
Don't cripple the avatars. That makes the game what it is. Upgrade the core processing capability of the server to make it truly scalable for the next generation of processors. You can get a start right NOW by using Hyper Threading and multi-core processors in today's servers.
Duke Scarborough