http://fonline2238.net/forum/index.php?topic=4.0
That link brings you to their start up tutorial so you know how to get everything running. Basically its an online client then makes FO2 multiplayer and harder!
You can actually do survival related things (eg find 10 brahmin hide and you can make a tent in the desert to act as a store house for all your things!)
GET IT NAOW!
The bigger the community the Better :3

Already posted by Drelmanes just few post down.

Getting into it slowly.
It's hard and frustrating.
Distance between places is big, unfriendly fellow players numerous and traveling very slow.
You can chat with fellow players, the world map is large and some places offer banks where you can open an account.
Due to great distances your likely to run into thugs and animals.
Thugs can be frustrating as they shoot and kill you from distance which results in respawning somewhere in the dessert.

Are there any penelties to death in this multiplayer version?

You lose everything you were carrying.
I know its frustrating getting into, im only level two but have loads of guns now (2 10mm, a mauser, a 10mm sub machine gun, a shotgun and a 14mm) and about $1500. The way i found to do this was quite simple;
I ran around in the desert until i found good guys battling bad guys (e.g NCR patrol battling raiders) then i during the fight i would loot the bodies of the raiders, and then run off to the nearest town and sell the stuff or keep it.
Im only doing this to get the hang of the game though, cause their goona implement 3D soon to make editing easier for the dev's, which invovles a complete system wipe, so everyone will lose everything and be Level 1 again.
Things i recomend
Getting repair and science up. With science at 30 you can pick flint up (for making weapons) and with repair at 30 you can search empty barrels for junk, which you can then sell and get guns (VERY HANDY!)

1 annoying thing about selling stuff is the 30 seconds countdown timer.
When that's over, you have to have made the offer.
It sounds like a lot, but some traders carry a huge amount of items which takes a lot of time to browse through.
Fubb, a tip for your cash:
Redding, NCR and Broken Hills have a bank.
Opening an account costs $100 per bank.
You get no interest, but at least your money isn't lost when you get killed.
Downside with wandering around in the desert is you may encounter raiders or highwaymen with assault rifles or hunting rifles.
They hit you from a large distance, causing you to get killed quickly.

FOnline is an MMO, not multiplayer.

Massively Multiplayer Online Role-playing Game. ;) But yes, title should have said MMO instead of multiplayer.

So has the community improved since then?

slowly improving
but right now they shifting from 2D to 2.5D/3D so it might take a while
although for me it is still lacking any story there ...

Have they wiped the characters yet or will that come later?

there were 2 wipes, one few months ago and one in march
official blog: http://fonline2238.blogspot.com/

I don't visit their forums much, but do play almost daily.
In game there are groups of players (factions), but further there's not much of an in game community.
As for lack of story, you can do quests, but especially in the northern towns you have to be careful as there are daily battles over town control there.
There are also gangs of player killers wandering the wastelands.

mmos might be nice(for other people, personally i dont enjoy them one bit) but id rather play a co-op version.

Enjoy this MMO while it lasts, I can't see Interplay allowing it to live after they've released Project v13.
That being said, I will be trying it tonight.