Do you know of any japanese mmogs with friendly communities of japanese people to improve my writing and reading and conversation skills?
It would be cool if it didn't need the use of any proxies as they make lag jump to atrocious levels, also.

Tons of people you can talk to on FF14. Try and join a talkative guild and then you are set.

Its kind of working for me, although perhaps not as well as I hoped. I spend too much time now playing the game and not talking. That said its also been great for picking up lots of new vocabulary, as everything spoken to you goes to a copy and pasteable event log.

Second Life used to have a pretty big japanese presence. I don't know if that's still true. Just avoid the weird stuff.

You'll learn a lot of internet slang that way too. MMO players tend to talk in a short-hand that's non-trivial even for native speakers when they first see it. (It's extremely similar to how people talk in English MMOs and when you google strange terms or abbreviations you'll find explanations for them.)

I also played a little counterstrike on Japanese servers which is funny because as soon as someone sorts out that you are a foreigner they start ignoring the game and asking you dumb questions.

My only advice is to make sure you let your party members know that you aren't a native speaker and let them come to terms with that up front. Some people won't want to deal with it, but it's better to find that out as soon as possible. There's plenty of people who will go out of their way to help you and you'll have a lot more fun with them.

If you aren't into the monthly service fee of FF14 check out PSO2.

Phantasy Star Online 2 is pretty good too. I feel kinda bad that I've been playing instead of doing more 'proper' reading, but the game definitely isn't short of reading and listening to do with all the voiced dialogue.

I wish I could afford the monthly fee for FFXIV but I really can't.
I'm going to try PSO2 out!
I remember I used to play mabinogi before it required a proxy to play over there and I learnt a lot. I want to know what I'm capable of learning now that I know a lot more.
Also does anyone know if Shin Megami Tensei: Imagine requires a proxy?