The AI on the current baddies really sucks. They just keep running straight at you and you can just spam your sword button to kill them. They should run around you like a player would or shield and do special attacks.
I actually made a smart baddy a while back, and I have to say it fought quite well(ran around the player, no special attacks though).
Sure this would require a quick serverside timeout, but with a powerful server iClassic runs on it shouldn't be a problem(my advanced baddy used like 0.05% of the servers cpu, and that was only when someone was by it(like 0% when no one is there) Also, keep in mind that was on a regular playerworld, I suck at scripting, and the iClassic playerworld is probably like 100 times faster.
Also, we should be able to raid dungeons with baddies as a guild, and with gralat prizes/hats or something(quests!) or maybe even spawn baddies for a couple hundred gralats each.