Skyrim Online isn't really an MMO. Heck, it's not even a fully functioning mod yet, nor will it ever be officially supported. It's pretty cool, though, particularly given that its aim is to enable co-op play within the sprawling world of Bethesda's latest Elder Scrolls epic.
When we first heard of the mod last winter, it was pretty rough, with other players displaying as inanimate prisoner NPCs sans any clothing or armor. Now, though, the devs have managed to add some armor, basic run and walk animations, and general chat. There's still a lot left to do, including a party system, trading, AI synchronization, and PvP, but you can see a video clip of the recent progress after the break.
[Thanks Sandboxer for the tip!]