The fact that you can spend your skill points at any time means that there is always some tangible reward for your adventuring. There will also be other forms of points you can earn, that can activate new skills hitherto unlearned. While a player could conceivably allocate spells to nearly every category, the resulting character would most likely not be very good at anything. The system encourages specialization. Naturally, combat will be a big part of the Asheron's Call experience.
Battles are a series of considered clashes of weapon and armor.
The designers are confident that lag won't be a problem. By calculating the distance between the combatants and other parameters at the time of the swing, the game should be able to then accurately resolve the combat on the server no matter how much the client's visual representation of the battle varies due to latency. We couldn't verify this when we saw the game, as only two players were in the world and it was on a fairly slow LAN connection, but the theory is sound. Combat commands can be bound to keystrokes, so speed shouldn't be a problem either. A rumble in the dark places of the earth.