To answer these questions, let us turn back the pages of time, to the day so long ago when I first bought World of Warcraft. Back then, I was excited to read about Blizzard's roleplaying server rules, but when I actually got in the game and started playing, I learned that Blizzard itself was, in fact, a bit lax on the rule-enforcement. It seems they already had a few more subscribers than they originally planned, and found that policing the roleplaying realms was a feat even their mighty powers could not accomplish. Fortunately, however, roleplayers themselves mostly policed their RP realms by informing newcomers, "We don't talk out of character in the /say channel," and so on, whenever the need arose. They defended their hobby and protected their space for it with pride.
As time went by however, even some formerly committed roleplayers reached the level cap and met with some difficulties they didn't know how to overcome. Some roleplayers discovered that they couldn't be the one true hero who would save Azeroth from all evil, and felt as though that left them without any real role they wanted to play. Others simply lost the sense of immersion when they started raiding the same instances again and again at the level cap. Some roleplayers, alternately offended by non-roleplayers giving them grief and overzealous in protecting what they viewed as their territory, gave rise to the term "RP nazi" -- trying to enforce all the RP realm rules... all the time... all by themselves. Roleplaying, as a creative endeavor, is not well-suited to such rigid rule-enforcement, since different people find they like to do it in different ways. And, like so many situations where people playing a game argue too much about the rules, sometimes the rest of the players get fed up and go home. Some, like Nova Barlow over at the Escapist, not only quit roleplaying themselves but actually encourage others to quit as well.
Possibly the most discouraging problem for established roleplayers was an ever larger mass of people who somehow signed up on an RP server without even knowing what roleplaying is. A few of my friends all but gave up roleplaying completely once such people seemed to outnumber all the rest. For my part, I had always thought that the realm-selection screen you get when you log in for the first time makes it at least reasonably obvious what "RP" is all about, but one discussion here at WoW Insider showed how people often sign up on PvP servers without realizing what that means, so clearly it can happen a lot, if not more so, with RP realms as well.
So where do roleplayers go from here? The new year is coming soon, so it's a good opportunity for WoW Insider readers to give roleplaying a try if they haven't already. For those of us who do like roleplaying, it's a good opportunity to think of ways to promote a positive understanding of roleplaying in the wider community, both to attract new and talented roleplayers, as well as to dispel ugly myths that some non-roleplayers have been carrying around for a while. There currently isn't enough education out there about what RP is, or how to RP well, to inform everyone that ought to know about it -- but there's a lot we can do to change that.
Personally, I would love to see more roleplayers start some sort of journal which can highlight what their characters experience in the game, in addition to sharing any insights they have about how to roleplay better. These sorts of web-journals are sometimes written entirely in-character, but they needn't always be that way. The main thing is to try to say something interesting in a concise way. If you start such a journal (or if you already know of a good one), please comment on it below.
It'll also help if more roleplayers come together in the game as much as possible rather than staying dispersed all on different servers. If you have the time to do so, scope out the roleplaying forum for peer-reviews on which RP realms are the best, and possibly see if there's a guild or two that really strike your fancy. Head on over to that server (or to a good guild's website if they have one), and try to strike up some positive contact with them, consult about your character idea, and see if you can't get involved in roleplaying from the very start of your character. Make sure you can commit to some sort of regular interaction with them of course -- just like any guild, RP guilds get frustrated if people just join and then disappear for long periods of time.
You could also post questions on any given RP realm forum about how many people on than server tend to roleplay with the random players they meet in the game, versus how many tend to treat it just like a normal PvE server. You can check out WoW Insider's own discussion about where the best roleplaying servers are, as well as just heading over to a new RP server and asking around, whispering people in your nearest big city.
What ideas do you have about how to improve roleplaying in 2008?