I'd rather have channels than a completely seperate server (meaning, you can use the same characters on either). Fixes the lag better that way since people can always choose the less busy one.
I just died from another three minute lag-spike, but I didn't get the option to teleport to town. My corpse lay there on the ground for twenty minutes, bringing around 15 nearby aggro monsters over to it. They started kicking and biting at my corpse, beating it apart for ten minutes until a fighter came along and killed them, using me as a tank. I just had to quit the game.
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