Currently the damage formula is 3+(2*level) with increases to the level multiplier for higher-level mobs. Originally it was 2.7*level but I reduced it to allow for the STR damage adjustment for NPCs, which will be added to EQEmu fairly soon I think (from what I've read).
Buffing NPCs wouldn't be a bad feature, providing the buffs they cast weren't totally out of your level range. Something like SoW or a strength buff isn't too unbalancing for a low-level character, but Aegolism or something is ridiculous - the HP boost is around 20x your base hitpoints at level 3-4.
They're already thinking of adding a level restriction for player-cast buffs on EQLive, so level-1 players can't get KEI and Aegolism to effectively get the HPs and mana pool of a 30+ character..
Apart from the faction and merchant issue, another bug/problem I noticed was with quest scripts. The buffer for scripts seems to be smaller than in earlier versions, and if an EVENT_x block in a script is too long, it actually crashes the server, rather than just not working.
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