I like the idea of a RPG in SL. I've played RPGs for years before I came here, also organized quests and such there.
But to make it attractive I really believe a RPG in SL would have to take advantage of the strengths of SL and not simply become a bad copy of some 1990s old medieval leveling game.
Strengths of SL:
- Creative and interesting people
- Many unique places in the world
- Event system
- Freedom to script and build
- Adult environment
Buying a sim, placing some medieval castle with rats and giving people some sword will not work. DarkLife did this and I think it was only a limited success.
My suggestion would be to start with a quest based roleplaying game for new players. Playing this game they would learn about the world of SecondLife and its people. It would have some kind of advancement with a score, or experience points and levels. But instead of mindlessly killing rats they would have to:
- Find places
- Solve puzzles
- Talk to people for cues and answers
- Complete tasks
Yes, I am really thinking along the lines of quests like finding the tea house girl in Crimson and beating her in a game of Go. Or finding a hidden room in Oden's castle and answering the riddles posed by the speaking frog in that room. Or doing a delivery mission, flying a zeppelin from one end of the world to another. Quests could also be complex, multistep, also themed to some residents' or resident groups' special interests/hobbies.
Of course to do this would require not only some programmers, but also active and continual participation by reliable people in the role of "feature characters" and as hosts of certain quest objects on their parcels. It could be great fun though and give more meaning, more life to builds and places that currently exists in SL

Another advantage: It could be developed in a decentralized way. People or groups of people could design their own quests. Then a central group of people in charge of the RPG as a whole would only have to do quality control: Test if the quest works, decide how many experience points a player should earn for solving it

Of course people could cheat, look for spoilers on websites or ask other people. But why should they? As long as quest rewards are not L$ there is not much of a reason to cheat quests. And if somebody still cheats I don't think it would affect others.
People who like monster killing could develop a fighting system and quests that include killing monsters. Each player would defeat the "black dragon" or "fire spider" only once though, just as they would only solve each of the other quests once. If they do a second time they would not get experience again.
This would be an idea for a basic RPG system with interesting content contributed by many people. Maybe if this one day is reality in a second step powers could be added that players can use to influence other players, some simple fighting or competition like in a tournament. But this would be much more difficult to do well, so I suggest to first focus on an open quest based game
