Call them whatever you like to call them

[MrObject]

I played Ultima Online when it came out spent a lot of time on it and nobody used the term toon to refer to their characters, nor did I hear people refer to their characters on Everquest as toons, or even the playstation MMO (Adventures of Everquest). First time I heard the term was WoW (pre their first graphic update) as their characters appeared cartoony.

You are partially correct, Ultima Online your characters were usually refered to as 'chars', but other graphical muds like The Realm and Neverwinter Nights people called them toons. In Everquest Online Adventures they used a lot of terms like char, av/avatar, and toon. The majority of the crowd using the term toon played The Realm, Neverwinter and to a lesser extent M59.