These article (it's part of a large Java tutorial) might be helpful in explaining the basics of advanced I/O over networks and servers. However they are very basic, so don't be surprissed if you know everything in them.http://math.hws.edu/javanotes/c10/s4.htmlhttp://math.hws.edu/javanotes/c10/s5.html
1) I could only offer a educated guess...
2) First determine how often you want data sent and received. If you want gameplay to be smooth then send/receive this data more often. If you want it to be laggy (which may be part of the design of your MMORPG based on the description you provided) then send/receive it less often, preferable at not at a constant rate to give players a feeling of true lag. This actually sounds like a good idea, you could add a lag zone to your game in which players try to play with extreme lag.
The number time data needs to be sent/received is also dependent on the game speed. If it were a fast paced game then you obviously need to send/receive it more often.
I assume that you also want keypress to be data send from the client and that you want the server to send back client locations. The old MMORPGs used to have problems with hacking because too much stuff was done client side. If you want teleport/movement hacking in your CRAPPIEST MMORPG make character location determined client side. If you want to avoid this have only keypress sent to the server and let the server calculate the next position, sending the new player location to the client.
3. I think I saw two books on Java MMORPG design on Amazon once. However both of them were quite old, out dated, and recieved less than praisworthly remarks from people who purchased them.
The solve this problem you could look for books on Java Networking and books on general MMORPG design.
The Java Networking book will help you understand how to send data to and from your server.
The general MMORPG design book will help you understand what kind of data you need to be sending, how often, and to whom. It will also cover aspects of MMORPG and it might tell you things to avoid (which are valauble for you considering that you are making the CRAPPIEST MMORPG, when it says "Make sure not to" cross out the "not" and program away.