Thank you Massively for drawing our attention to the 3D Space FPS vest which actually INFLICTS PAIN ON YOU when you get hit. Check out the video of the guy getting shot in-game. Hilarious. A future candidate for a Darwin award if I am not mistaken.
Of course this version only simulates physical damage. The mmo version would really need to mimic magical damage too. A decent electric shock should do the job I would think.