[Kereth]

I've played a couple different MUDs, and usually they all come down to variants on the "Combat begins. Our characters start hitting each other, and occasionally we use abilities" setup. The trick comes into what else you add to that. A few keep points I've found that have helped:

Pacing:
If you're sitting there forever as the text slowly scrolls by, spamming the same command over and over, it gets boring real fast. Faster combat, where you have to be prepared to run, heal, or otherwise change tactics on the spur of the moment add a lot to the excitement.

Unpredictability:
If (A > B) { A wins }. There needs to be some random factor, as well as an element of player skill, even in games that do a lot of character leveling. I've played some games where if you fight a monster, you'll either win every time or lose every time, except for a small number of extremely closely matched battles. Things like stunning effects, critical hits, randomized special attacks, and so on, can do a lot to change that, so that even a tiny foe can still threaten you if they get lucky enough and your guard is down.

Stakes:
When the stakes are higher, you enjoy it more, but keep in mind that everybody loses eventually. If you have nothing to lose, the fight isn't terribly exciting, but if you lose everything, you may be unwilling to go into danger or simply give up as years of playing get wiped clean from one permadeath.

Complexity:
Ranks of combat, complex party interaction, status effects, elemental multipliers, summonable pets, teleportation, ranged/melee combat, stealth, environmental effects, spell/skill interruption, and a great variety of non-redundant character types, races, weapons, and so forth, can go a long way to making any fight interesting. This comes not only in player-side game mechanics but in opponent-side as well. PvP is the easy way to get the opponent to be smart and original, but even in PvE, I've seen some great stuff done in the past, from simple things like shapeshifting and tactic swapping over the course of the battle to more complicated things like ambushing the players after a retreat, summoning members of the group back, even constructs who disconnect their fingers, allowing them to sneak up on the players and hide in their backpacks (to later explode, if not discovered in time). Levels of flavor beyond just the basic autofight (parry, hit, hit, parry) and damage dealing skills in an all-human world of fighter/mage/thief/cleric are a fantastic way to keep things lively.