I have an idea that is a slight spin-off of Nick's.
I actually think it would be cool to see a fantasy/magic style town. In the state contest Azrael said people should make the magic bar incase they introduce it in the future. What a better way to introduce magic skills than in a fantasy themed town?
Anyway, my dream town would have strange structures and mythical NPC creatures! They could have some mushroom buildings and other generic storybook style things. They would obviously need to upload each building though, considering classic tileset wouldn't have the capability to do that... Still, i think it would be awesome. They could get really creative with baddies and this could also introduce many interesting quests. Doubt this will happen, but i can dream, right?