It's been said multiple times on the topic of player power levels: "We just get more and more powerful, beating bigger and bigger things. What happens when we beat everything? How can you challenge a god?"
Thinking in the vein of a traditional MMORPG, like WoW, then yes; the developers most likely could not challenge players if they had godly powers. However, if we experiment with the genre a bit, why can't we take a game like Black & White or The Sims and make it into a unique online experience?
So, wouldn't it be cool if players WERE omnipotent? Let's make the setting a universe. We have four realms: The first is the mortal plane where all the various planets and galaxies are. The reason we are using a universe instead of just one planet is simply due to the sheer number of potential players. This realm is where a good 75% of the gameplay takes place. You have your followers on your planet. It's all yours and only yours. This planet is your solo content. It is also a measure of your power, but not like levels. It is a number than can fluctuate based on your actions. Lose a battle, lose followers. Win a battle, or do any number of actions to aid/oppress your followers, you gain followers. Your followers have free will: You must convince them to venerate you.
Aid or Oppress? This is where two other realms come in, which are more of social lobbies where vendors and other services are kept. You are given an avatar to use in these lobbies that you can change with whatever currency is used to any other form you wish: Animal, humanoid, or just creepy floating eyeball. There is a Celestial and an Infernal one. Deities, through the actions they perform to gain followers, will be ranked as good or evil. The only grey area is the starting area, which is the fourth realm called Limbo. It is where your deity is created and learns his/her/it's powers. Balancing good and evil acts will allow you to visit either lobby, but this would be a difficult task in itself with little reward beyond that.
Interaction between players would be in the lobby or in the mortal realm, good deities waging war on evil deities, or assisting other players battles by sending troops to aid. I'm thinking a turn based or RTS style combat, in which troops are magically transported to the field of battle. Another idea would be to allow deities to create mortal champions, much like the figures in Greek and Roman mythology. Powerful allies, but losing them in battle would be a major setback for your forces.
Of course, the release of this game would be hindered by the possibility that people might find it religiously offensive. However, Black & White has had a decent following and I'm sure many people would love to see a third installment of the series, so there is a market for a similar type of gameplay. There are plenty of challenges for players who want to become deities. Hopefully a game will be able to eventually offer them.