A more detailed description of the subject matter cn be found here:
http://mccp.afkmud.com/
I've never programmed a MUD before so my apologies if my explanations don't make any sense.

>Two questions, since you seem to know something about this:
>
>1. What's required on the client side? Some sort of local
>proxy that sits between your off-the-shelf client (e.g. zMud)
>and the MUD?

mcclient is a proxy that that compresses in the background. Some clients come with MCCP. It opens a dos prompt and there is a small config file to edit (one line) and you're done. You can download a copt of the program here: http://www.acidspray.com/mccp.html(Yes I realize it's a competeing MUD's website!) I think either the server or the MUD has to enable MCCP for mcclient to compress and send to the server though since when I tried it nothing happened. But this I am not sure of.

>2. I can't see this being very useful for broadband users, so
>I'll assume the target audience is players who use dial-up.
>Don't the popular modem connection protocols (V.90, etc.)
>already include compression? If so, is MCCP even supposed to
>provide any benefit on the client side, or is it designed
>solely to reduce outbound bandwidth on the server?

You are right in that it will not be useful for the broadband users. But dialup users (yes there are still a few out there) do experience a client side decrease in latency. The server is also reduced in ongoing bandwidth. I really can't answer your modem question but I can say from personal experience that my MUDding has been smoother with the client (or maybe its just an effort justification affect, I don't know).