I actually have a copy of this somewhere and never played it. It's probably the oldest game I have that I haven't played. I bet it hasn't aged well at all.
I've actually spent most of the day playing this (home sick from work) If you have zero nostalgia for it I think you're right. There is some merit to the combat but you have to deal with a lot of archaic design to get to it.
Found this neat mod while looking for a widescreen fix for: Oni: Anniversary Edition. It provides fixes for the original game and nice inteface for downloading and installing mods. There's lots of great stuff, from re-textures to new combat scenarios.
Granted I have a lot of nostalgia for this game but it's still great fun, the melee combat is surprisingly deep. It does show its age in some spots, e.g. no manual saving coupled with checkpoints that are spaced way too far apart. The enemies wielding ranged weapons also have a tendency to gang up on you.
Also, some of the dialogue is hilarious. Enter the deadly brain!
I've never spent any significant time with an MMO, played a few hours of WoW and Star Wars Galaxies back in the day. Seeing some positive buzz and considering the Final Fantasy trappings I might pick it up. The question: how suited is it for the inexperienced MMO-player?