[quote=@Lvl Down]
Any idea on what the first dungeon should be like? 
-What element? 
-What type of boss?
-Should we do a .hack plot and have a major glitch eventually pop up in the system?
-What do you propose?
[/quote]

If its going to be a low level dungeon, you could make it underneath the starting city, the sewers/secret labryinth.