In my opinion..
There are some issues in this thread that should be separated off into their own discussions. (solo vs. group playstyle preference considering shard population and connection speed; template vs template in regards to pvm viability)
While I have opinions on those topics, I will refrain from commenting on them here.
Regarding the pet revamp..
I am concerned with the possibility of permanently altering a pet, thereby making it less desirable in the future and/or to another player. I would like to see, regardless of which system-type is implemented, the ability to undo the alteration. This could be similar to the armor enhancement system, or through use of an npc-based system. (It could even be something that resets at server up, in which a tamer runs through a short quest (10 mins or less) that sets the abilities of a pet for the rest of that day.)
I would very much like to see other pets made useful in both pvm and pvp settings. Since those settings are very different, it may help to consider each setting individually. Following that logic, we should first look at the reasons that certain pets have become dominant in their respective settings.
pvm
1. greater dragon
2. dragon turtle
3. cu sidhe
(honorable mentions: nightmare/rune beetle, nightmare/white wyrm, frenzied ostard pack)
These pets have come to dominate because they are the only pets that can handle the damage output of most boss-level mobs and spawns. Cu sidhes barely hang on even when they are not the current target. (All of this is out the window if you have a large enough group healing the pet)
For other pets to be used more often, some combination of their hit points/resists/wrestling need to be improved.
pvp (this sections should get redone by someone who has more experience in pvp..)
dreadmare
bane dragon
cu sidhe
(honorable mentions: bake kitsune pair, greater dragon, beetle/mare)
Admittedly, I do not pvp very often (I'm terrible..). When I have dabbled, I have found that those three are the hardest hitting pets that can be used as mounts. Mounted pets have another distinct advantage in that the only way to harm them when they are being ridden is through the riding swipe move. With the ability to use slayer weapons/spellbooks, unmounted pets can be killed very quickly. Furthermore, if one is not trying to hold a chokepoint, the movement speed difference between mounted and on foot makes pets that cannot be mounted undesirable.
If more pets are to be viable in pvp, either a pet's movement speed should match that of a player, or nearly every pet should be mountable. To keep from further unbalancing pvp, pets should not be able to move while they are casting spells.
(I would very much like to see two items introduced to the game - 1) earrings that let human/elf characters "fly" or move at mounted speed yet can still be "dismounted" through special moves, 2) a gargoyle item that lets them ride mountable pets - this item should not need to be equipped or should not take up an existing gear slot)
Something else that I think would be cool would be that each magic skill, when combined with taming, would have a special pet that could only be tamed/controlled/bonded by players that have both skills on their template.
bushido - greater hiryu
necromancy - skeletal dragon
ninjitsu - shadow tiger
chivalry -pegasus
mysticism - greater skree
musicianship - siren
spellweaving - ancient cu sidhe