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Well, yes, technically, there's not much difference between an MMO, a MUD, a MOO, a MUSH, etc., but we give them all different assignmens so that players can more readily differentiate between them all.
When I post about MMO*s, most people immediately think the following:
1) Graphical
2) Run by a big company
3) Monthly fee
4) Sold in a box in a store
5) Comes with a custom graphical client created by distributor
When I write about a MUD, most people immediately characterize the game with some of the following thoughts:
1) Text
2) Need/can choose a client to log on with
3) Not hosted by some mega-corp
4) Possibly free or low payment
5) Combat + leveling of some sort
MUSHes and MOOs are usually associated with the following traits:
1) No coded combat system
2) Lots of RP
3) Big/long poses
4) Complicated emote system
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Now, my lists aren't perfect, especially with the MUSHes and MOOs since I don't spend a lot of time on those. It's pretty clear that the big MMOs are based on the same concepts as muds. They just have graphics. In fact, Mythic Entertainment (the creators of DAoC and the future Warhammer Online) first started out running commerical muds, one of which was Darkness Falls. (For anyone that played DAoC, that's where they got the name of that dungeon we spent so much time in.) I wouldn't be surprised to see more commerical mud developers go the same way as Mythic and possibly end up with their own graphical MMOs.
However, the different designations for different types of games are pretty important, in my opinion. For example, I would be very disappointed if a game that I wanted to play turned out to be an MMO instead of a MUD. I'm burnt out on MMOs whose simplistic gameplay and level grind have broken this camel's back. Give me a deep, roleplay encouraged mud anytime. (But that's a totally different topic.)
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