Okay, this is cool !!!!
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Essentially, all player characters and many of the humanoid NPC models are really the same model and then are morphed in real time using bone scaling and some other fairly cutting edge tech. So, sitting in memory is the core model and then the data that we apply to that model to turn it into a human or a dwarf, etc.
In addition to memory savings, this also allows us to do the same with clothing/armor/etc. The advantage there again is memory savings, but also that a particular suit of armor, for example, looks the same when worn by two different races (unlike, say, EQ 1, where the same item of leather armor looked different depending on what race was wearing it and actually refered to multiple models and texture sets).
Not only does this make things more consistent and realistic, but it also gives us room to have a lot more different types of clothing and armor because we don't have to store X number of leather armors in memory (where X is the number of player characters), we just have to store the 1 and it morphs and fits everyone we want it to. So now we can have a bunch of different types of, say, leather armor that are not only represented as different items in your inventory, but also look different in-game on the actual character.
This ability to scale and morph in real time then not only allows us to change a base character model into both a human and a dwarf, but it also allows us to scale and morph the figure after it's already been turned into, say, a dwarf.
So whereas the difference between a dwarf and a human are significant, we can also make smaller changes, allowing us to change a dwarf's facial or body to make players look more unique. This has been done to some extent in other MMOGs (for example, SW:G and EQ 2), but we can take it much farther because virtually every aspect of the model is scalable/morphable. And by being able to make more significant changes in appearance, you can easily make, say, two elves look very different, even at a distance (whereas older games you often couldn't discern the differences unless you got really close). And, again, this applies not only to facial features, but also the body, e.g. you can have fat and skinny player characters.
So, if this all works out, and it looks like it will (we were almost ready to show it completely at E3, but missed by a week or two -- ah well), everyone can pretty much look unique. And this also applies to humanoid NPCs. As you walk through a city or village, the guards should have different faces and body types, etc.
Lastly, because this is done in real time, we could even do some crazy stuff like have spells that deform or change a character for a period of time, which I think would be pretty awesome. - Aradune
