Everyone's already made very good points.
Emotes may not be essential, but they sure make the world seem more alive for me:
When your char actually moves around according to the stated text action. You don't have that, for one, with * * emotes.
Something I'd still really like to see in an MMO: interactive emotes. Might be a little difficult, but I don't think it's impossible.
For example, you give something to someone, and they actually take it from your hand. Or: an interactive hug or kiss emote, that actually involves two people, instead of two chars standing still, or one of the chars making a blowing kiss hand, or something.
URU's share Relto (and other) books, is actually a kind of interactive emote. You hold out a book for someone, and then they reach out and put their hand on it, and something happens.
Now, it -is- a little slow, because it involves two people needing to do something (1. you click share book, stand near your target, and click them. 2. You wait, sometimes long, because: the target needs to click the book that will, by your action, appear on his screen.
When both parties have fulfilled what's needed, you see your chars enacting the emote-thing), but, it's incredibly neat, to be able to do something like that with two people, and actually see both your chars interacting like that.
It makes the world seem more real and alive.