Clockwork Gamer has a good juicy post up about how MMOs first learned how to do things from MUDs, and since today is Old School Day, I thought it was appropriate. Wait, you haven't heard of Multi-User Dungeons? If you've never played one, you'll probably be shocked that they used to fascinate people-- imagine an old-school computer, with its green text on a black screen, dialing into another computer and entering a text-based virtual world. As in, you dial up your favorite BBS, and a message greets you "You are in an inn. There are exits north and west," and from there, you type in words telling the computer what to do, while other users play the game with you. You can try the whole thing with the java client here if you want.
A far cry from the virtual worlds we know today, yes, but that's where it started. CG actually focuses on the higher level of things (in many MUDs, players could actually form guilds, and wander around the world together-- "go north"-- killing dragons-- "attack dragon with great mace"), but even the most basic of MMO thrills was originated in the MUD world. "Seeing" a virtual character pass through the room you're in ("Kingofworld enters the room. Kingofworld leaves the room.") was a thrill, because you knew that there was someone else, looking at a screen just like you, behind that character. On the other hand, as CG points out, there were a lot of things that MUDs could do that graphical MMOs can't nowadays.