Suggestion: All of the above!

And do it all with extreme style!

I think once we get the house building up, each player should only be allowed to have one house at a time, as it was suggested. This allows the above mail system to work, which I think would add a new level of depth. But there should be choices in building houses- even if your limited to the houses of your nation, there should be several types of possible building. We also really, REALLY, need a magic system. Say, here are your choices:

You can get stronger attacking abilities, and the potential to weild many melee weapons.

You can get speed bonuses, great agility, and prowess (mabey a semi-auto aim) with projectiles.

You can get magical abilities, the cool swirly lights, but your physical weapons do very, VERY, little damage, and you can't even hold heavier weaponry.

There could be several other choices, which would add a nice little variance