How do you handle quotes? Consider:

emote @man glares at you and snarls 'Now you shall die'.

And the rarer but still conceivable recursive quotes:

emote @man peers at you and ponders, 'Did you really just say "you stink" to the king?'

Incidentally, kind of off on a tangent, but in most DIKU style MUDs, most MUD-generated actions (as opposed to emotes) let an act function handle all the name-expanding stuff. So it wouldn't be very hard to set up a pronoun system which would extend beyond single lines. Compare:

The guard's slash wounds you.
The guard's slash wounds you.

To:
The guard's slash wounds you.
His slash wounds you.

The violence function would be sending the same data twice to the action function, but the action function would detect that in the 2nd line, the guard is already the subject.

I'm not saying whether such a system would be _better_ or not, just different, and I've thought about coding it in as a configurable option.. though the same trouble with quotes arises there as well