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How has the former in your opinion affected the latter?

Several gamers I know have recently returned from the MMORGs Everquest and Dark Ages of Camelot. The games they run are very fast and furious affairs with an inordinate amount of magic loot.

Also, the missus, who likes a CRPG for it's mindlessness often comments that loot on games I run is low. This may be due to expectations caused by CRPGs where blue tinted stuff falls like manna.

IMNSHO CRPGs are nice in that they can sate everyone's inborn desire to munchkin like they were 13 again. But I also feel it's driven up expectations in tabletop.
Another good is the realisation that what every player truly wants is a rehash of Zulu Dawn and how to do it well. but the games do get very combat heavy as a result.

What do others think? What is the good, the bad and the ugly of it all.

No CRPG lets you twink out like Disgaea: Hour of Darkness does. Even you weapons and equipment can be leveled up to lvl. 100. Your characters, on the other hand, top off at 5000.

And that's not counting Transmigrations.

At first consideration, I wondered if the comparatively recent trend toward systemic minimalism (as witnessed by Silhouette, Unisystem, d20, etc) might have been instigated by programmers who had grown disenchanted with all those clunky exceptions, house rules, and special cases. But I honestly think the D&D / Vampire fanbase (which makes up a solid chunk of the total gamer population of the world) is far too large to emulate such a comparatively small phenomenon. They simply don't feel the need to borrow from what essentially is an attempt at multiplayer D&D.

These last years, MMORPGs have grown to be quite a common pastime among gamers, but I honestly think they have managed to achieve that popularity by intentionally distancing themselves from the conventions of tabletop role playing, whereas CRPGs have begun doing the reverse. Witness the attraction of games Arcanum, Baldur's Gate 2, KotOR or Fallout. They do contain ass-kicking galore, no question about that. More to the point though, they're threaded through with plot, dialogue and characters that are absolutely vital for the game concept. Remove them, and the game would no longer be recognizable.

This element, the pursuit of a plot, doesn't exist in the MMORPGs I've seen. In the best ones, it's sort-of-almost replaced by infrequent character play with other players. This, however, is seldom goal-oriented and generally it's not something casual players even bother with.

As for the loot tendency, that's exactly how I feel whenever I open a D&D book. Some games and settings just plain encourage the proliferation of incidental artefacts and gold -- loot, if you will -- and others don't, to varying degrees. I've even seen a lovely game recently that contains working rules for a barter economy, which is nice if you want any sort of realistic mediaeval world.

In closing, I think CRPGs will continue to bridge the gap between MMORPGs and P&P, while the two extremes are going to diverge further. I certainly doubt that the MMORPG scene will ever achieve the dynamism of the P&P community.