Progression Server - Is it technically possible?

[Elrim]

You're right that if there aren't enough people it doesn't work very well. As a comparison though, Uthgard DAoC has about 900 people on at prime time and 300 on off hours and there are exp groups all the time. The leveling systems are very similar (you want exp, guess you probably should group), and therefore groups are fairly plentiful. That is not to say that you won't spend a lot of time LFP (as was the norm), but it can still work with those kinds of numbers. I don't think you could attract that number to multiple servers, but perhaps there is enough demand for one server at least.

Edit: Also note that in DAoC there are 3 factions that cannot group with one another. So take that number and divide it by three. Even with peaks of 300 people per realm, there are plenty of people willing to group on an MMO.