Tracy Seamster of ZeniMax Online and Steve Danuser of 38 Studios have worked on their fair share of games and at GDC Austin they were willing to sit down and talk about their own faults and analyze MMOG storytelling. The two talked about tools that developers can use to help tell a story, noting that no matter how engaging a quest is, players aren't too keen on reading. The two cited good and bad examples of storytelling, invoking some old classics like The Sleeper in Everquest.
The Sleeper - The original EverQuest had a terrible quest mechanic, so writing wasn't the place to do storytelling. Storytelling in EQ was in the atmosphere, the dungeons and catacombs. The Sleepers tomb was a great example, a labyrinth of passages filled with Sentinels guarding a mysterious treasure. The dungeon's ending ramped up to several dragon guardians, and culminated in the waking of an epic dragon that tried to eat the world. The actual lore of the place didn't matter, what mattered was the 'holy shit' moment when you actually woke the dragon.