Also, I've considered if we should eventually move toward this system also handling the customizing of the appearance of items too - it would be better in terms of reducing lag and make more sense IC too. But not sure if it would be too inconvenient - some thoughts on that?
Well, with some characters I prefer the current method, since for example the accesoires section.
If your character has a backpack, he or she can easily remove it when entering an indoors area where it isn't needed, free of cost, wherever. A great tool for RP.
Likewise goes for some other examples, like the robes section or even torso. With a few clicks you can swap the robe or torso slot, making it look as if you've put on a coat or just took it off.
On the other hand, I do think it'd be easier (especially visually) if you can see the clothing changes on the dummy, instead of on yourself. Giving you a chance to compare old with new.
And in most other cases it does make more sense IC (although you could choose to RP that aspect out IC with the current system as well, simply visiting a tailor when changing clothes.)
So I'm not sure if the pros outweigh the cons, is the lagg reduction significant? Or perhaps it would be possibly to introduce both systems in place? (Unless that takes a lot of space on the hosting system or whatever.)
