If your favourite kind of game is multiplayer, free, allows extensive customization of the client and of course uses the best graphical engine available, look no further, the MUDs are for you. Provided that your imagination is wide enough to enjoy the textual descriptions, that is.
Across the years I have played a few MUDs, all involving RP, PK and fantasy worlds. Although not a PK fan myself, I think that this element is a requirement, without which the game would be too easy. No matter how good are the game creators, the computer-driven characters will never be as cunning and dangerous than the human beings.
The small commented list follow, but have a look at the Mud Connector if you want a roughly complete list of all the MUDs.
MUME is a very large MUD, with hundreds of opened zones and online players. It follows closely the works of JRR Tolkien, and more exactly, MERP's world layout.
This MUD (abbreviated "lost" or "LR") has been around for a while, although not well-known. Its current areas are a mix of Tolkien's Middle-Earth, Zelazny's Amber, and some more add-ons. Most of the players and immortals are current or former MUME players.
WARP was a young MUD created by three MUMErs and based on the Old World of the Warhammer fantasy universe.
Their rewritten engine was still quite rough, however the world they and their builders created was well done. I have put some resources together, since such a site was not available yet.
Update: WARP is dead, R.I.P.!