Should scale pretty well to hundreds, only key state changes and clothes/messages/etc changes are synced when they happen, it uses dead-reckoning, client authoritative and it's pretty accurate/fast.

Ah cool. So you replace NPCs with real players as they come in, or add them into the mix?

Add them. The graphics support many more. That's why it's low poly. Of course if it gets popular I will start reducing the NPC count. Now they're there otherwise there's no "rave party" feeling.