First some housekeeping, I will be leaving the realm of MMORPG discussion soon, and move on to other areas as a focus. Drop me a comment if there's a subject you think I should cover. Additionally, I will be adding some game reviews when I get the chance, and expect some more top 5 lists. Also, my profile has been updated. Believe it or not, I'm not an Accountant from Afghanistan, rather blogger has those as the default values for profession and location.
Now, on to PVP. I think that any MMORPG needs some element of actual competition. Player vs. Player combat is the easiest way to do this. A lot of ideas about PVP have been thrown around over the years, and every existing PVP system could use improvement. Let's take a look at a few.
Star Wars Galaxies has had several types of combat and PVP systems. The system has majorly revolved around the war between the Empire and the Rebels (The Galactic Civil War). Players could choose to be overtly a member of their faction, or be a covert operative. Overt players could kill other overt players and enemy NPCs, and covert players could kill overt playuers and enemy NPCs. However, when a covert player killed an enemy of the other faction, or aided an overt ally, they got flagged temporarily as overt (called a Temporary Enemy Flag or TEF). They could be then killed by the other faction as if they were overt. The system was hard on those who didn't want to PVP, but wanted to be members of a faction (as the easiest way to get faction points was to kill enemy NPCs). Also, Rebels had the additional problem of being turned overt if scanned by imperial stormtroopers and found to be a rebel.
The later incarnations of SWG removed the TEF, instead players could be combatants (non-PVP) or Special Forces (PVP) members of their faction. An imperial Special Forces would have to sit and watch as a Rebel Combatant killed stormtrooper NPCs. It was largely the end to real PVP in the GCW, as the non-PVP players were immune to retribution. Later, Sony Online Entertainment released a specific PVP area for the purpose of furthering the GCW. The Reustess Conflict is a very popular area, and largely the reason for playing the game anymore. However, the only change to the PVP system is that Reustess is a quest-based area where PVP has goals (similar to battlegrounds in WoW) and everyone is flagged Special Forces.
It should be noted that SWG also has always had a bounty system (in the begining just against Jedi) that allows Bounty Hunters to track down other playesr and engage in battle against them. If they kill their target, Bounty Hunters get paid. In the early phases, Bounty Hunters could group up to kill their targets (they had to to kill Jedi players) but now it's strictly 1 vs 1 PVP (things have been roughly rebalanced so that it is far more equal now than it was before). Also, there is a duel system for 1 vs 1 combat.
World of Warcraft's PVP system is simple and complex. In specialized battlegrounds, you are flagged, and directly competing against members of the other faction. In the world, it gets more complicated. On a PVP server, there are zones for each faction and neutral zones. In your zones, you are unflagged unless you choose to be flagged, but the enemy is always flagged. In their zones they are unflagged unless they choose to be flagged, and you are always flagged. In neutral or contested zones, everyone is flagged. On non-PVP servers, you are only flagged if you choose to be, or you attack a flagged character or heal a flagged ally.
There are other examples of PVP types out there (one I will be looking at soon is Warhammer Online, but I need more research on it), but these two examples show some of the important parts. PVP needs to be fun and engaging, with an element of real danger to be fun. However, you shouldn't loose all that much in forced PVP, or else fewer players will want to play. Also, it shouldn't be possible to kill enemy NPCs and heal your over allies without becoming overt youself, or else the other faction will be frustrated and stop playing.
A final note: PVP shouldn't feel like a football game. That's the biggest problem with WOW's battlegrounds: I don't feel like I'm fighting for my life, I feel like I'm trying to win points (and largely I am). In SWG classic, most PVP revolved around defending your faction's bases (usually bases your guild spent months getting faction points to buy, and even more time supporting and using as a base of operations). Beating off attacks actually mattered. A lot of players hate grinding honor in WOW, and honestly, that's not something I'd loose sleep over. However, to defend my guild's faction bases, I'd stay up all night. One of the best times I had in SWG was as a newbie, trying to do anything I could to help the guild defend our bases. I didn't get to do much before being killed, but I'd clone and head right back out. If I tossed on good heal, I considered it a good job.