After more thought, I think DM mode could also fulfil an on the fly debugging option. This would make it great as a play testing tool for full automated mod makers. It would also enable the DM to learn the editor tools necessary without having to learn all the tools at once to get value from it. IMHO the following are the only essential requirements:
- Procedural generation that can be saved and modified for future use (this should be a standard feature of the editor anyway, even minecraft can do this and it makes world building so much faster and easier; also encompasses Preplan and save an area option)
- Territories and factions (Ayvah's page 4 of this forum suggestion) is also a good idea for the game in general; I suspect the factions are being implemented as races for DOS 2, but should be generalised (e.g. Immaculates Vs followers of the seven).
- DM playing monsters OR AI controlled (depending what the DM wants to do, changeable on the fly and specific to each NPC)
- Alter NPC attitudes on the fly; NPCs have a different attitude level for each character, the initial value being determined by faction/race relations between the NPC and PC, but alterable by DM.
- Initiate/end fights on the fly
- Add/Remove enemies, traps and such on the fly
- Permadeath/new character option (this means DM should be able to arbitrarily give XP bonus/penalty to PCs whenever they want)
- Chat channels (particularly private chat where DM can single out player subset of 1 or more). Having in game audio channels would be cool, but teamspeak etc can fulfil that requirement. However a whisper [text] feature is essential, perhaps only available when PC/PC or PC/NPC are next to each other in game smile

4 players and 1 DM should be more than enough, but capping at default 8 players makes sense - even the AI takes several seconds per NPC per turn, and a DM controlled NPC will take longer. With 1 character per player, such delays will start becoming noticeable if there are too many characters in a fight; there's a good reason most desktop rpg groups have 3-5 players.