Video games have always strongly depended on the concept of a villain. Almost every genre from action adventure to real time strategy uses the idea of a "bad guy" to help drive the story and game play. Games are a lot like movies in this regard since the lack of an obvious antagonist usually means your watching something very boring. MMOs may be a fairly new type of entertainment, but they also follow the villain hierarchy that exists in movies, games, and comic books.
The Villain Hierarchy:
1) Have a ton of minions who evoke no empathy (mobs)
2) Have some henchmen that the player can only fight after slaying lots of minions (mini-bosses)
3) Have a final shadowy main bad guy in the background (boss)
It's a simple formula but there are a lot of variations to the three main rules depending on what type of genre your playing. Real time strategy games usually go with the megalomaniac villain who wants to take over the world which fits in with the game play quite nicely. First person shooters on the other hand seem to prefer going with a mad scientist or alien queen. You would think the two wouldn't have much in common, but they spur the story along in a similar manner by sending disgusting creatures to kill the hero. I think this is so players can feel more justified using extreme violence to protect themselves since the enemies are so ugly.
MMOs traditionally try to appear more massive in scope then normal video games so their villains are often portrayed as having huge armies and controlling entire countries. A simple mad scientist just doesn't work when your game can potentially have 10,000 heroes all fighting evil at the same time. This is why fantasy MMO's almost always bring evil gods into the equation. They have the reputation for having hordes of devoted followers and terrible monsters, which heroes can spend endless hours fighting against. The list of evil gods in MMOs is quite extensive with Sauron, Arthas, Innourak, Cazic-Thule, and Sargeras just being the tip of the iceberg.
Games which aren't so deeply entrench in fantasy have more options when deciding their villains. Some like City of Heroes decided to use a multitude of evil villain factions, but I always felt an overall mastermind was necessary. World of Warcraft uses a couple separate villain factions like the Chromatic Brood, the Burning Legion and the Scourge. But in the background its Sargeras whose pulling the strings and is the root cause of all three. I think this gives the game a nice layered approached to its lore and I bet a lot of lore junkies liked slowly finding out that there was a mastermind behind everything.
I just wish the vast majority of the villains weren't the same old archetypes we've been seeing in dungeons and dragons since the seventies. There's a ton of other options and game worlds like World of Warcraft and City of Heroes have the advantage since they allow both magic and technology.
Different MMO Villain Archetypes:
Crime Lord
Nothing is more evil then greed and there are some interesting design choices a MMO can make if their main villain is a criminal. The action becomes less about saving the world and more about preventing a heist or a drug deal. The crime lord may not have endless armies, but they also keep a couple of bruisers and hit-men near them.
Madman Nihilist
The standard villain of Japanese role playing games seems to fit right in with most MMO plot lines. I always think a villain is more terrifying when they are just plain insane. Also there seems to be some sort of association with evil clowns like Cefka in Final Fantasy 6, Violator in Spawn, and even the original Joker.
Megalomaniac
One of my favorite villain types and a classic from the early comic book days. They are often characterized by having private armies and fondness for advanced technology. Ming the Merciless or Kane from Command and Conqueror are some definite examples of megalomania that I can think up off the top of my head.
Super Computer
Ever since mankind first programmed machines to mimic the intelligence of a retarded three year old we've been afraid of what would happen if they ever got any smarter. Witness the massive amounts of evil machine based lifeforms in our entertainment like Brainiac, Skynet, and HAL. They're all emotionless geniuses that want to destroy all humans.
Over-Used Villains in MMOs:
Evil Overlord
The classic Dungeons and Dragons villain stereotype who usually threatens small kingdoms and has a princess held hostage. They're usually some type of noble and have a title in front of their name like Count or Baron.
Evil Wizard
Do I really need to say anything. Heroes have swords and use brute force while villains have spells and use intelligence. It's a very lame stereotype that has existed for quite some time and it's just now starting to change. Age of Conan is a step back in my opinion since almost every "mage" uses evil demon power in the game.
Mad Scientist
A modern update to the Evil Wizard but the same basic principals apply. One thing I though interesting is that while a Evil Wizard can sometimes rule a country, the Mad Scientist is almost always regulated to controlling a city or large town. I guess its because they can't teleport magically from place to place or something.
Evil God
Sauron isn't really a god in the classical greek sense, but he is mostly immortal and powerful. It seems fantasy literature will always measured itself against the original "bad guy" and as a result it's filled with evil gods and goblin like minions. It gets old after awhile especially in the MMO genre which often uses fantasy literature as inspiration for its lore.
If anyone has some more villain mastermind archetypes, feel free to put them into the comments. I'm not really looking for classes but more an overall personality/motivation description. After all unlike video games most MMO's should never allow the hero to actually defeat the main villain in the game. I doubt World of Warcraft will ever let us fight Sargeras.