Of course, you can go further back and point out that a lot of the "innovations" that The Game Which Shall Not Be Named included were present beforehand, and you'd be correct. But after the EverQuest era of game design, City of Heroes stood as a vanguard of a new design philosophy. It was a game with unparalleled customization at the time, a game that put forth the idea that you could be just as cool at Level 1 as you could at max level. So how have things changed? How far have we come in the years? There's almost too much to cover to go over everything... but we can hit the big points.
Right out of the gate, CoH faced a problem that's not enviable for the genre. DC Universe Online comes with built-in emotional investment. Even Champions Online had the benefit of a setting that was known to at least several old-school pen-and-paper gaming nerds. Paragon City, by contrast, was a complete enigma. There was no way for someone to have grown up reading about Statesman and Sister Psyche and Manticore, since they hadn't existed prior. And so the game had to go with the depressing but inevitable route of creating a backstory whole-cloth, villainous groups that felt similar to others while trying to retain individual identities.
This took a big hit back in Issue 3, roughly a year after the game had launched. The Fifth Column had a unique resonance, giving players a chance to fight modern holdout Nazis -- and any comic book fan loves punching Nazis. It's part of what the genre of superheroes was founded upon, after all. But they were replaced by the Council, who are... well, HYDRA. Taking all of the possible Third Reich out to avoid offending anyone, with the result being an evil organization that exists just to be an evil organization.
But this wasn't a game-destroying problem, and it was offset in no small part by the fact that the creative team was smart enough to push for and produce a comic for quite some time taking place in the game's universe. In-game, missions focusing on groups like the Rikti via the Rikti Crash Zone helped flesh out backstory, and each major update has expanded the storyline and the prominence of the cast.
Issue 8's revamp of Faultline, two years after release, turned what had previously been a trial zone into a story-oriented cavalcade of events, examining major backstory events and giving a clearer picture about the overall path of the story. The upcoming expansion promises to expand the story even further, giving us a chance to peek inside an alternate world and make choices about who we ally ourselves with -- still not a common feature in online games.
When CoH launched, it was in its own way a spiritual forerunner to games like Final Fantasy XIII and Mass Effect 2 -- it stripped out almost everything extraneous from the extant model of the genre. Housing, crafting, gearing -- all non-existent, except for the broad strokes of Enhancements. It would be about three years before the game introduced a crafting system, but when they finally did, the Invention system was received with open arms. It has its flaws and its issues, but on a whole it's provided a great power boost to those who take part, and it hasn't weakened those who would prefer not to bother.
Oh, and there was some other system. Architect something-or-other. Maybe you've heard of it.
For an addition that's only a year old, Mission Architect has caused a huge change to the way everyone thinks about and plays CoH. It's not simply that it's a user-generated content system; it's a user-generated content system with continuing official support, a wide toolset, and almost everything that developers themselves can use. Enterprising fans could recreate almost any mission in the game with it, and the breadth of creativity available has led to the system being hard-wired in most people's minds when they think about the game.
And it would be remiss not to mention the sidekick/exemplar system, which has been in the game since launch (albeit in a slightly less useful form than its current revision, which is about six months old now) and allows players to group together and gain rewards regardless of level differences. In all practical terms, the system means that no matter how fast or slow you level, you can play with your friends. That's an admirable quality, and one that other games would do well to emulate.