MUD stands for Multi User Dungeon. Muds are an offshoot of the popular AD&D paper roleplaying games. Right now there are perhaps thousands of different varients of muds being played around the world. If you have never played a MUD before I suggest you read the FAQs first.
I have characters on a few different MUDs, but my favourite one is The Edge of Darkness.
Yahoo! has a huge list of MUDs and resources, there are indecis of the muds as well as links to various clients and server software. Currently I am using a client called MudMaster, which is a Windows95 client designed to look like a DOS one. I prefer this for several reason. One is that information tends to scroll faster than in a windowed environment, and also most muds are written with an eigthy charatcer width screen in mind, and some windowed clients mess that up. While I do have some pet peeves with the program, it is the best I have found if you are using Windows95 and a PPP connection. On the other hand if you have access to a unix shell account then Tintin++ is the only way to go.
Updated June 30, 1999.