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I've never heard of Rob Penton and have no idea what he's done with MUDs, so I'd take his book with a grain of salt, personally.
As for other books, check out Jessica Mulligan and Bridgette Patrovsky's "Developing Online Games: An Insider's Guide."
I have to admit I've only skimmed it, but their publisher asked me to review a detailed proposal for the book before they began writing it and it seemed comprehensive to me, albeit from the production side of things. It may not be all that relevant if you're doing a hobbyist project, but no doubt even hobbyists can learn from their approach. Ms. Mulligan, incidentally, is currently Executive Producer at Turbine (who is doing D&D Online as well as Middle-Earth Online). Ms. Patrovsky has done a bunch of stuff including being CEO of Genie in 1998, serving as a 3rd party producer for Everquest in 1999, etc. Both are definitely worth listening to based on their experience.
Another good one is Lee Sheldon's "Charater Development and Storytelling for Games."
It's not specifically about MUDs, but one of Lee's major interests is MUDs. He knows his stuff when it comes to storytelling, and has worked on both tv projects and game projects. He also often gives day-long tutorials at the GDC (Game Developer's Conference) on storytelling in games. (Obligatory disclaimer: I wrote a little 1 page essay for the book on the use of politics in storytelling in MUDs/MMOS, but I receive no financial benefit from sales of the book.)
Finally, you may want to read Raph Koster's recent book, "A Theory of Fun for Game Design."
Raph was the co-creator of LegendMUD (text) back in the early 90s, was designer dragon on UO, creative director on Star Wars: Galaxies, and now serves as Creative Director for Sony Online Entertainment. I haven't yet read this book but Raph's a smart guy who understands online games and games (despite SW:G's relative failure compared to the expectations for it).
--matt
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