PvP in the current form can be fun. Small arena, close combat, high twitch factor fun, but it can get boring quickly: 1. get buffs, drink mana pot/ eat food 2. jump in pit, 3. fight for 1 sec - 2 min 4. die, 5. start over
How about take of the existing dungeons and turn a few of them into PvP instances. Allow the full range of spells, with party vs party fighting. This would create lots of the senario type fights that you see in other pvp games... capture the flag, defend a hold point etc etc.
Just a thought...