I've been thinking about doing something like this as well. I've decided to use Adobe Flash:
http://www.adobe.com/products/flash/
Here is a very good article about using it to create mmog's:
http://www.gotoandplay.it/_articles/...ilding_mmo.php
If you'd like to see an example of the types of games you can create with it, just type 'flash games' into google, I think you'll be pretty impressed. There are also heaps and heaps of tutorials available (which is another big plus in my book).
Hope that helps. Good luck.
A little update, I've just found a FREE 2D game engine that can create browser based games. It's called the 'Golden T Game Engine':
http://www.goldenstudios.or.id/
Here are some of it's features:
Quote:
Key Features
· Supports for major operating systems, Windows, Linux, and Mac OS X (Java write once run anywhere)
· Extremely easy to set up a new game
· The game can run in fullscreen, windowed, or applet mode (embedded in webpage)
· High-level accelerated 2D graphics API supporting OpenGL as the render targets
· Support three image types (.gif, .png, .jpg) with masked color
· Fully supported mouse and keyboard input
· Audio support, support for wave, midi, mp3, and ogg (.wav, .mid, .mp3, .ogg) audio playback
· Time based game movement and animation for making a frame rate independent game
· Complete bitmapped font routines for drawing left, right, centered, and justified alignment text
· Powerful and very flexible sprite management, support for animated and directional sprite
· Support for various background types, image background, tiling background, and isometric background
· Built-in collision check, with basic, enhanced, and pixel perfect collision detection
Java Specific Features
· Double buffering with bufferstrategy or volatile image
· OpenGL renderer via JOGL or LWJGL
· Hardware-accelerated images
· High-resolution timer, support for time drift calculation
· Fully object oriented library, utilizing Java OOP to maximum
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It looks really sweet, and it doesn't have the high price tag of Adobe Flash. So I'm gonna give it a try. I'll let you know how it turns out

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