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The Daily Grind: How would you make a D&D MMO?

We've made it no secret here at the Massively offices that we love us some Dungeons & Dragons Online (especially with our regular Wednesday evening guild play), but we'd be naive to think that DDO is the last D&D MMO we'll ever see. Considering that the franchise has a long tradition of console titles, PC games and MMOs (dating back to 1991's Neverwinter Nights), we'd go as far as saying that another D&D MMO is probably closer than we'd expect.

So if you could define the parameters of this theoretical new game, what would you choose? What studio would handle it? What D&D setting would you like to play in the most? What edition of the rules? How would you overcome the difficulties of transitioning the pen-and-paper game into a MMORPG? Would it follow DDO's highly instanced format, or be something else entirely?

Cast your level one spell of Creative Thought, and let us know: how would you make a D&D MMO?