And now, time to wrap this up and get to the point. So, the problem with translating a morality system into MMO's, as I touched on in parts 1 & 2, is that the player, as an individual, can't really have that much effect on a persistent world. Since one of the main advantages of making moral choices in a game is the consequences that each choice being apparent, this makes implementation into MMO's difficult. In an MMO, the player isn't the main protagonist of the story, but rather a smaller player in something greater than him/her-self. That being the case, what would work, as far as a morality system is concerned, is to have the players choices effect mostly themselves.
Using WoW as a basic template that I'm sure anyone who found this blog is familiar with, lets say you have the Horde and the Alliance. Now, unlike WoW, where, except for possibly the Forsaken, no group is really good or bad, per se, but more some middle ground, let's assume for our fictional MMO that the Alliance really is the good guys for the most part and the Horde is the bad guys. What I would propose is that you don't automatically join a faction, but that you are approached by the factions (and later, factions within the factions) based on your heroic deeds.
For example, let's say you like helping farmers clear their land of whatever foozles have infested it this time and you do a lot of quests to help them near the beginning. A member of the alliance contacts you after a while and lets you know they have been watching your exploits and feel you have what it takes to be a member. Conversely, if you have been slaughtering peasants to steal their lands and belongings for corrupt lords, the Horde may wish to have you among it's ranks. Once with the Horde or Alliance, you could continue to build your reputation through your deeds and get the attention of a sub-group. Say you like to poison waterholes to get the job done. The Forsaken may take a shining to you.
An extra layer to this would be the possibility of losing reputation by going against whatever faction you had aligned with. Maybe you have grown weary of kicking puppies and would like to kick goblins for a while. You could work to join the other faction. To add another layer, there could be situations where you build rep with both by becoming a double agent, with each step risking discovery and cataclysmic reputation from both sides!
There are countless possibilities for this type of system and I'll be sure to list more as I think of them, but for now, I think I've said my piece. I would play that game.