I don't know if combat is still closed, but a number of reviewers have stated that EQ2 is 100% better than it was in the early days of its release. Broken quests are fixed, combat works properly etc. Unfortunately the player base has long since departed for other games, like WoW, GW and CoH.
Personally, I'm holding out for Vanguard, the "spiritual successor" to the original Everquest. It's slated for release around Feb-Mar 2007. But be warned, it's everything that WoW isn't - challenging advancement, not much solo content, and no instances or zones, just one big interactive seamless world...