Thanks for those replies all,  I definitely got back more input than I
expected.  So let me just quell a few concerns.  I'm afraid this is
going to be another long post (sorry, lol)

Yes, I am aware of the scope of this project.  However I'll reiterrate
that at this time, my goal is not to produce any kind of functional
multiplayer environment.  So regarding DB issues with concurrency I
think SQLite will fit the bill nicely.   Any attempt at a multiplayer
game / MUD server would almost assuredly mean a rewrite / new project
built  using any knowledge I gain from building the single player
environment -  and as far as modifying it for multiplayer if I wanted
to,  I mean something small like allowing a couple friends to join in
(ala early examples of small MP environment from the pioneering FPS /
RTS games).

Sorry if I confused anyone on that point.  I simply wished to express
my desire that the game complexity be comparable to a MUD environment
with regards to the complexity of the world mechanics, and
interactivity with objects / npcs in the environment itself.   As
opposed to those really early text games which while nice, still
couldn't compare to a MUD with a good parser.

So its safe to say while not a "throwaway" project,  I intend to take
it quite seriously and probably put it out there for fun at some
point.  

In reply to the  Ruby games framework comment.  Nothing really
satisfies me, and I am waiting for things such as  Ogre.rb to mature
and become feasible for use in production.  I can say I would love to
do a graphics based game at some point,  something 2D Akin to the
early Final Fantasy's,  or maybe even Isometric 2D/3D  strategy type
games (FF Tactics, Front Mission, etc).  Those are likely YEARS in the
future for me though.

I can honestly say I feel SQlite is up to the particular task I have
in mind at this stage though.  I have done a lot of thinking about
tables, rows, and specifric column fields I will need / want  and if I
have to add an extra column or two in the future  I don't think I will
be too concerned.   Most of the data stored in the DB is going to be
pre-made content,  such as room descriptions and stuff like that.   I
do plan on keeping a lot of  run-time generated content in memory and
then saving out what is needed when appropriate (a new item is created
on the fly, and then it gets saved to the DB).

I think my particular approach to building my individual systems and
testing them, one at a time, before working on integrating them, will
leave me a lot of flexibility in needed changes to design and how
difficult it will be to change said design.   It leaves me a lot of
time to flesh out ideas in my head,  while I'm dealing with other
problems, and then write them down and whatnot.   Perhaps this is not
the most efficient way to do it, but so far its worked well for what I
perceive to be a relatively small project.

I have no intention of using rails at this point,  as I don't really
see a need for it for this particular case.   But I will admit I know
very little about it, and it seems like just another "web platform" to
me so maybe I am making wrong assumptions.

Also I admit I have 0 knowledge of  unit testing,  version control,
etc.  So I probably do need some education in those areas.

I so appreciate the links to those MUD projects, as I didn't know we
had that many in the community.  Although I am loathe to "steal" as it
were, from other projects  I definitely will want to look at them for
ideas on how I want to approach the same obstacles.

Events vs Threading:
I totally understand where that commenter was common from.  Threading
scares me!  Its one of the biggest things I have been fretting over
once I have to move beyond the stage of building my rendering engine
(Room based of course) and can start testing a "live" environment. At
the same time, Event Management,  stacks, queues, all that stuff
confuses the hell out of me.  But I definitely intend to have multiple
things going on in the background even if the player is idle.   I
gotta have a spawn timer/manager for mobs,  potentially a
day/night/weather system,  spell /item buff durations being monitored,
mobs and NPC's actively walking around and doing tasks, as well as
quest monitors & timers.

So I am definitely going to have to learn event management.
I totally understand the mountain I have just made for myself but I
feel pretty committed to it and I know it will take me a LONG time to
do this.   So I'm ready for the challenge. (I hope)

-Zach