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Other testing that has been done (most noteably by Locoweed) allowed 3-4 players to connect and actually move around in a very simplistic zone but they got such terrible lag even after months and months of "tweaking" it was often less than 1 frame per second. I know this because I took part in some of locoweeds testing and even after I abandoned 3DGS for a more flexible solution for MMO development I continued to follow his testing as I am always curious if anyone will ever get it to work.
This is very ammusing to read and I had a great laugh. 
I've used Locoweed's Biosphere IV tutorial and with the same code I had no problems letting 10 clients join and play around. So exactly which tests are you referring to? I didn't change any code and it was all over the internet.
Off course, you'd need more people for a MMO, but I simply couldn't try this out with more than 10 people and I wanted to check wether or not 3DGS was suitable for multiplayer games up to 10 people. Well, it's definately suited for it and the comment about getting 1 fps is insane.
If you code a multiplayer game the wrong way, then yés you won't get more than 1 fps when a certain amount of players have joined, but to say all efforts ever made have failed is nuts.
I'd say DOWNLOAD locoweed's 2004 tutorial and try it out for yourself, there's a fully working .exe included.
I know 10 players isn't enough for a MMO, but Fastlane seems to be far when it comes to testing the MMO capabilities of 3DGS and so far his tests have shown that it's possible.
Seems to be your word against the evidence he has shown so far. 
Cheers
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