I'll try to provide a brief synaposis of what usually happens. At the start, players spawn around a central point (or at least we should, I'm not sure how the mod handles it exactly) but are spaced out quite a distance. What happens next is up to the individual player and their desired approach/strategy. To use a Starcraft analogy, players can try to rush (attacking players early) or tech (mining for resources in order to craft good equipment) or something in between. There are many ways to approach the game, some more creative than others and some with a greater chance of success, and its entirely up to the player.
Generally speaking, the standard way to play is the spend a good amount of time "gearing up" before you move out and try to find people. Players will want to mine:
-Gold; gold ingots are needed for golden apples
-Iron; for armor and tools
-Diamonds; for an enchanting table, tools (espeically a pick to mine obsidian), and potentially armor
The general goal is to get as much enchanted equipment as possible. Iron is standard but diamond is excellent. Mining has its dangers though. Because health does not regenerate, players have to be careful negotiating the various mobs so as not to take unncessary damage. If you lose half your hearts while fighting skelatons, that makes you that much more vulnerable to being attacked by other players. Diamonds are also extremely rare because mass strip & branch mining are prohibited and players will therefore have to find them within caves, mineshafts, villages, and temples.
The player will have to decide how long they want to mine (particularly in one location) and spend looking for gold/diamonds/other resources. Remaining underground - particularly at night - is generally safer in terms of keeping away from mobs than the surface so long as torches as used liberally. Staying in one location though can cause you to become easy prey for players who are either on the hunt or likewise looking for resources. Though having superior equipment has its obvious advantages, one must not discount the power of ambushes and catching other players unaware.
Players can also visit the neither in hopes of securing the ingredients for healing potions (to use in lieu or in combination with golden apples). The Nether has its obvious dangers though so one must be extremely careful. Its a huge risk that has the potential to yield huge rewards.
So, yeah. It's really up the player how they want to balance things and approach things both strategically and tactically (whether preferring ranged combat over melee or vice versa). I know in one Mindcrack round someone created a huge lava fortress in the sky that acted to shake things up. As I said, the options are quite limitless but some are more likely to grant victory than others.
Eight seems plenty. I know Bart was interested so I'll see if I can get him to post as well. I'm not sure about lag. I think some is to be expected so players will just have to account for it. I guess we'll just have to see.