I highly recommend using optifine as it's been updated too. I'm using the Multi-Core version and Minecraft is now flying. I also recommend not using a toaster to play Minecraft on, but that's for another post. - If anyone wants tips on building computers mostly for Minecraft, mention it, I sort of want to write a massive post about it.
Now the bukkit team is working with Mojang (well, is part of Mojang), I'm sure bukkit will get even more awesome and make multiplayer mods even easier to use. I'm not yet open to suggestions for mods on the server (i.e no mods), BUT in the future I will look into it. Personally I'm hoping for a fire/ice/explosive arrow mod that doesn't require client installs. Oh and that paint mod..
I want sea creatures too. Like this one (from the fossil/archeology mod):
