You could do like Morrowind does... it''s night/day cycle is pretty quick, I have not measured it (I''m too busy killing monsters and finding money :-) ), I estimate that a day passes in about 1 hour (I really don''t know because there isn''t a da where I sleep some hours, and this skips a few hours that pass in real time)

Mac for productivity
Linux for development
Palm for mobility
Windows... for the Solitaire

I like the stagger idea. Ten hours is a long time, but I think it would be a good system. I was always a little leery of a system in which you can walk nonstop for three solar days. Few players can put in ten solid hours of play, so a day will be a long time.

Also, the staggering will facilitate time-based planning. Certain tasks that can only be achieved during a certain part of the game "day" could be planed based on real-world scheduling and game-time cycles. If your four-man team only really plays at 8pm, and you want to do a job that can only be done at dawn in the game, then you can plan to get together next Wednesday evening, when 7-9pm here is 4pm-1am hours in-game, during which time the virtual sun will rise.

Sounds like a good implementation. The trick, of course, is making people give a damn. I always liked the Castlevania system of making night time more dangerous than daytime, but all the other ideas here, like time-related powers and phenomena, are all valid. It might even be worthwhile to include some sort of complex astrological progression, so that during certain months or weeks different phenomena occur. Seasons could be put in, as well. Perhaps certain quest-specific events would only take place during a certain alignment of conditions that happens about once a month, or even less frequently. There are endless possibilities.