Well I'm thinking of things like making a modified client which renders the walls slightly transparently so that you can see what mobs are around the next corner. It's not at all easy with EQlive but would be very easy indeed if you have the source code.
The server can obviously only send updates for nearby creatures but I think it's totally impractical to do complete visibility tests on every creature for every client on the server.
Also I think there are some things that you need to do client side simply through lack of cpu power on the server. I think that it's impractical to do all collision detection on the server for all players. Which mean that if people modifuy their maps locally they'll be able to walk through walls, and get to places they should be able to. I just don't think that any reasonable server is going to be able to spend the cycles to do full collision detection for all clients. Perhaps doing occaional random checks on the clients to catch cheaters would be enough
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