If you haven't seen your nerdier friends recently it's because they're all too busy playing World of Warcraft: Wrath of the Lich King. It's a good expansion, certain to keep the 10 million+ players hooked for another year. And for game designers WotLK brings a really interesting new technology to multiplayer online games: phasing.
The basic idea of phasing is that two people standing in the same place in the world can see different things. I'm in a beautiful meadow while my friend has drunk the magic potion and is seeing and interacting with a demon-torn battlefield. Or maybe I just learned how to talk to spirits and I can see an NPC that no one else can.
What's exciting is phasing allows the world to actually change. The problem with MMOs is that the world is static. My heroic group kills the big evil bad guy and saves the city, but 10 minutes later the bad guy respawns and everything is back the way it was. It has to be that way because otherwise no one else of the 20,000 people playing on my server would be able to kill the bad guys themselves. MMO players accept that the world never changes without comment, but it's unsatisfying.
With phasing the world can change. So far I've seen it used to great effect in Dragonblight, one of the new zones. The 100+ quests tell a long story about a fight between the good forces of the Alliance and the Horde against the evil Scourge. And towards the end of the story you see the actual battle, and when it's over you see the aftermath, destroyed buildings and screaming wounded soldiers. And it's permanent: those NPCs are now dead forever. It's very effective storytelling.
Phasing also solves some game design problems. It allows the developers to give players private experiences without going entirely out of the world into a private instance. Being able to smoothly give players semi-private experiences in public places is quite innovative and I'm excited to see what else Blizzard can do with this tool.