The original Everquest, despite the name, actually didn't have all that many quests. Your day-to-day way to gather experience points and level up was to get into a group, go somewhere with mobs of an appropriate level, and stay at that spot the whole day, killing the same monsters over and over. That was called "camping" at the time, but over time more and more people called it "grinding". Fast forward to 2007 and grinding the same monster over and over is only done for reputation, or for farming a specific drop from that particular mob. The day-to-day way to gather experience points and level up is doing quests. Has questing become the new grinding?
Players always take the way of least resistance to level up. In Everquest that was staying at the same spot, because "breaking a camp" was quite hard, but then taking out the respawns as they popped up one by one was much easier. There was a disincentive to move at that time. In modern games like WoW, EQ2, or LotRO, doing quests is the fastest way to level up. As long as a game has a sufficient number of quests, and the quest reward is worth the additional effort of moving, leveling up by doing nothing but quests all day is the preferred general activity.
But in the process quests have become less special. Hands up, how many of you aren't reading the quest text any more, except for the short "kill 10 foozles" summary bit? World of Warcraft originally had quest texts arriving very slowly in the quest window, trying to force people to read the text. But an option to make quest text appear instantly, so you could click accept without reading the text, was one of the first WoW UI mods, and later it got included as option in the game. EQ2 is trying to make people listen to the quest text by having it spoken out, but most people still just click through it. These games literally have thousands of quests, each one a small story why this quest giver wants you to have those 10 foozles killed. After having done that for a while the stories all begin to resemble each other. They aren't exactly Hemingway quality to start with, and after having read a hundred, you have read them all. Quests have stopped to be about the story, and have turned into an additional reward for killing those foozles, you would otherwise have grinded anyway. That is still an improvement, because it encourages people to move around a bit more, but nevertheless for some people quests now feel like the new grind. Something you only do to advance your character, not because it is fun.
What we need is better ways to tell a story, and better stories. Final Fantasy XI has special quests which are told with cut scenes, and include your avatar in those cut scenes, which is pretty cool. Lord of the Rings Online has its epic quest line, which is intertwined with Tolkien's epic saga from the books. These are steps in the right direction, but we need more of those.
The underlying problem is that most of the time you aren't really interested in killing this mob or doing that quest, you only do it for the experience points. What you do doesn't really matter, as long as you gain the points, which makes you level up. It is the new abilities and powers you get from leveling up that you really want, you couldn't care less about the farmer having a foozle problem in his backyard and needing them killed. TheMonk, one of my readers, sent me an e-mail with an interesting proposal: What if there was a game without experience points and levels, but quest lines where the reward was directly the unlocking of a specific skill? The direct route, the quest line leads to the skill you want, and not to some generic xp which get you the skill when you have enough of them. Guild Wars, which is less level-centric, has abilities unlocked by quests, I believe. Having a direct connection between the story and the reward you really want might make quests more interesting.
As is so often the case, we have arrived at some plateau, a point in time where developers have found a quest-drive gameplay which works more or less, and implemented it in many different games. Many people currently think that this is the way it has to be, and best possible way to play. But I am sure that quests as we know them now are not the non plus ultra. Sooner or later somebody will come up with a more fun way of MMORPG gameplay, which is even more interesting. And then the current mode of advancing by doing quests all day will feel as antiquated as shouting "camp check" in EQ1 in the commonlands to find which orcs camps are already taken.