Reading from the Wikipedia article on MMOs, there is a proposed generational definition. I have whittled it down to commercial 3D graphical samples from each generation and my read as to what defines the proposed generation.
Defined As: Graphical, multiplayer, and commercial, they are represented by the list below from the first entrants in the category through until the first popular, commercially successful, and truly massive MMOs:
The Realm Online
Nexus: The Kingdom of the Winds
Defined As: Post-commercial success but pre-3rd generation, they are represented by the following examples:
Dark Age of Camelot
Final Fantasy XI
City of Heroes
Defined As: I have to quote the Wikipedia entry for the definition of third generation,
The most recent generation of MMORPGs, based on arbitrary standards of graphics, game play, and popularity, is said to have launched in November 2004….
And they are represented currently by:
World of Warcraft
I found this generational definition rather unsatisfying and to be out of sync with the discussions on what will make a 3rd generation MMO (since, if nothing else, it says we already have 3rd generation MMOs), but I thought I would toss it out.