Okay, imagine that you could make a game that saved everything that the player / NPCs did, and could be 'reset' to the start state. In other words it was a persistent world. What would you do with it how would you use it? (I think this could be done with a cartridge based system and a huge battery-backed up ram). What sort of gameplay would you implement?

Reminds me a little of Animal Crossing on the GCN.

I remember wanting to do this with an Old West theme. It was probably prompted by seeing gravestones from past failures in "Oregon Trail". I would like to go into a town on my second play-through and have people talking about my previous character. If I could be that character's son, or younger brother, it might make certain things easier or more difficult, depending on how I did last time. Buried treasure, bequeathed land and items, structures built or destroyed, and a long, gruelling tech tree would all make a persistent world interesting to me.

Persistant world in a state of war, wherein the players are real heroes that can
actually affect the outcome of battles in the war. Battle lines change over
the course of play, and every teritory can be traded. It would remove much of the
feel of normal RPG's wherein the lines are already drawn.

I think the coolest part would be that persistance gives the creator the ability to make a world where the player's actions/inactions can lead to him losing the game 100 hours in. The actions of the past can truly effect the future, but these effects are visible and reversable if the player is looking.

On another note, a persistant world where the player can grow up in and become a hero gives the
ability of a player to place items, and markings on the world, and to cause battles
to be in the history books. So in the end the player can look around the world and
see everything they personally did on their own outside the story line.

A persistant world is cool and more fun in my opinion. it makes the player think twice before doing soemthing like murder or stealing, makes the player actually worry a bit more about dieing. What i would do is make a game like morrowind but actually have every single thing logged, that along with good ai would be quite close to simulating the social workings of our current world, couple this with good gameplay and story you would have a hit. it would be like a mmorpg but not online where your actions actually count, quite fun i think.