I think your comments are dead on, ggwood. When one mentions quests, obviously it is nearly impossible to leave WoW out of the discussion, so I'll use it as my example. But here's a bit of background first.
I've played almost every major MMO since Everquest - not all the way to top levels, but enough to have experienced some of the major nuances of each game. I see the whole quest idea being expressed in very diverse manner - from the EQ way where quests are barely explained at all to the WoW quests that give you a mark on the minimap. I think that one of the biggest problems with quests in WoW especially is not necessarily with the quest itself, but with the whole faction system. Back when I played Dark Age of Camelot (which is still one of the best IMHO) the faction war was the driving force of the major game storyline elements. There were other antagonists introduced with expansions but those were still sideline to the three realm battle. Quests were almost immediately related to the storyline. You might be killing small pockets of Albions in Hibernia (past the super-lowbie "kill 3 xxxx's" quests.) The battle progresses until you are eventually in the battlegrounds and fringe areas fighting PvP. The WoW storyline, while epic, is tailored to the gear-hungry fools that care not for the story and just want to do stuff and get leet rewards.
Lord of the Rings Online is another good example of faction-driven gameplay. The whole idea of only being able to play a "good" character I know has cost Turbine some subscribers, but what is there is more immersive, especially for LOTR fans. WoW has the traditional "good" and "bad" factions but when you look at the Burning Legion, you wonder why they don't work together to rid the world of the Scourge. The story just isn't convincing enough. Questing for a purpose of killing a certain ghoul of Sauron's in the Great Barrows was a blast - I was there somewhat for the gear but mostly for the story and the accomplishment. Maybe with the introduction of the Achievement system in WOTLK, that will get better. I do know that LOTRO's deed system gives the player more reason to quest than just gear - a more intrinsic value is attached to it.
As with RL, doing things just for money and stuff are necessary, but the most fulfilling things you do bring you more value than just the money. Quests that can accomplish that make for much more fun than just that one cool rare or epic item.
-----
"If you want to pass life you can have one"