PlaneShift is more or less completely built around that idea. It's an open-source, community-developed game that's still not at full "release" status but does allow players and developers alike plenty of participation in the process. While the development cycle is slow by necessity, the game has just recently released its 0.5.9 patch, bringing with it a large variety of improvements and refinements for the engine and the game itself.
The game's art has received several sweeping overhauls; the biggest changes have been aimed at the game's engine in the form of fixing bugs and improving support for a variety of graphics cards. There are also updates to the game's AI scripting, allowing NPCs to act in a more organic and unified fashion. If you're an old hand at the game, the patch is no doubt worth checking out -- and if you've never heard of it, perhaps this is enough to pique your interest.