I think we've already gotten further than many of you thought we would, and I'll be sure to post some links to demos of the game when it's playable (right now you can run around but not much else).
Yeah, I don't get it - how come no-one mentioned Love? - http://www.quelsolaar.com/
Eskil is doing something insane, although in a very nice way (since he's a nice guy).
Although last time I saw it it was still a long way off having any actual "game".
As are you, by the looks of things. I don't think that's bad, or a problem - it seems to me you're shooting more for making "a multiplayer game-like virtual world". However you settled on it, the way you're doing things now (jME client, dont worry too much about the server) looks sensible (I would have recommended not bothering with any game stuff on the server side (be honest, use the simulation and VW stuff instead), but that doesn't really matter now). I suspect you're going to get completely screwed when you start to have a non-trivial number of simultaneous cilents, and/or when you start ot have a non-trivial amount of terrain and furniture (that's when most people's attempts spectacularly fail) ... but if you focus on Getting Things Done then you should be able to make something interesting to interact with without having to waste huge amounts of time on stuff that quikcly beomes clear Isn't Going To Work.
Anyway, for some more *practical* advice, I'd re-iterate what I said recently to a bunch of students who were working full time (60+ hours a week for 10 weeks) on making a new game from scratch - http://t-machine.org/index.php/2008/05/21/advice-to-students-making-games/