I still don't believe games like everquest or world of warcraft do all the collision and movement stuff on the server. maybe the server recalculates the movements, after the clients told him what they did, and sends correcting packets to the client, when something is going wrong.
When you cast in WoW you feel that you need the okay from the server, as you feel the lag when casting. when you see that you have a latenz from 1 second, yor will have to way 1 second from hitting the castbutton to seeing the castbar moves. same with attacking and stuff. But walking is not affected by lag. sometimes you have some lagspiked that feel like you had no networktraffic for 10 seconds as the fight "stops" and after the 10 seconds everything goes extremly fast (you get the damagemessages from the lagtime) but your movement is not affected. you can move while the lag and you get no correction at the lag, as long as your position can be reconstructed by the server.
When you use other travelingmethods than running (there are "birds" you can fly given routes with) and you have lag, lets say the moment when you jump on the bird, than you stand still until the lag is over and jump to the correct place as soon as the networkcommunication comes back.
So the movement is handled on the client and the server checks if it is correct. I think you have way smoother gameplay on this way, than when you need a okay for every move you do.
When I remember correctly your games control is done with the mouse. so you click on a place on the ground and your character moves there, right? So this would be something different, because the player has not 100% direct control over the movement of the char.
Well, was a long day and I may talk some weird stuff, I hope everyone understood what I said