Not really - i mean if there is ambush and such the game will stop by itself - so everyone can order dwarves around.
That would require all players playing the same embark location, in similar way as Dfterm works. And that brings a host of other problems. Basically that there are two options: all players share the control of all the dwarves and there is only one "fortress" or there are several separate fortresses in the same embark site.
Shared control of all dwarves is quite chaotic, just like those who have tried Dfterm can confirm. It's quite easy to mess out things when the orders contradict or the players can't come to agreement how the fortress should be run. What if one player wants to send the squad out to deal with goblins while other one doesn't? Or who should make the decisions about trading? Or choosing the baron?
What about having several forts in same location? Well, that means the size of the embark location must be big enough to host both (or more than two, depending on the limit of players). I usually need 3*3 embark location and I know lots of players need even larger area to contain their forts. But even if I use the 3*3, the minimum size of the embark location needs to be something like 6*3 for two players and 6*6 for four players. After few years the game will get very slow, as the size of map is very big and the amount of dwarves in the map is multiplied by the number of players versus the normal number of dwarves in singleplayer map. Have you ever been able to run a fort with over 300 dwarves even in 3*3 map? I haven't, it's way too laggy (last time I tried the FPS was somewhere between 10 and 15).
But lets assume that none of the problems I mentioned above are the issue. So, a attack (I combine thieves, ambushes, sieges, megabeasts and FBs under the same category as all of those in theory requires an action from player) comes and the game pauses. The players give orders and the game resumes. But what if something goes wrong? The squads get annihilated, there is a cap in walls or something like that? If the game can't be paused it means the player(s) are in hurry to solve the problem, for example by blocking the entrance with bridge. For me, depending on the development and size of my fortress, it takes around 8 seconds to find the lever and order it to be pulled. Eight seconds, which with 100 FPS means 800 frames. Average creature moves one square every 10 FPS, which converts to 80 squares in eight seconds. That's a lot, especially since it doesn't include the time it requires a dwarf to get to the lever, pull it and affect the bridge. During that time a whole squad (most probably entire force) of invaders can get inside and slaughter your dwarves. And thus you need to be able to pause in case of emergency.
Another problem comes in the form of hostile cavern creatures. Most of those path straight to your fortress if there is a route and the game doesn't inform you when one enters the map. So what if two blind ogres arrive and gets inside? Tracking those down while moving will be difficult if you don't happen to see them immediately. Zooming to announcements doesn't work since the attacker has most probably moved already and thus giving the kill command is very difficult. Again you must be able to pause just to locate the offender and give the command to kill it. Unless you like to see your fortress to fall due the slaughter or tantrum spiral.
If the forts aren't in same embark location then automatic pause for all players doesn't work since attacks may be discovered at different times and attack in one site doesn't mean it will happen everywhere else at the same moment.
To tell You the truth - most designations of the fortress would be given by the month period with only slightest adjustments on the go
YES... - it would be harder than normal, but NO - You wouldnt die on sieges while designating digging site
How about breaching the caverns the first time? Without pause you may not have enough time to seal it before something nasty gets inside, again due the time it takes to manually locate the site and designate required constructions and/or cancel the mining designations. Or what about safe tapping to magma sea/volcano? There are tons of such situations where pausing is more or less necessary to ensure everything goes as planned. Situations which you may not be able to take in account during monthly pause.
And what about the screen which force you make decisions? Choosing baron, trading and making trading requests are such situations. And then there are those liaison screen you may want to actually read instead of skipping (trading requests from mountain home for example). Would the game pause for all players when one player has such screen? And not everybody can have the meetings with liaison exactly at the same moment (same as trading) just because it depends on your own dwarves as well (are they eating, sleeping, tantruming...). And since it's possible to have three liaisons in total, one per season except winter, just those screens would make the game slow. And if the game is remains going, there is a big chance that something happens which the player has no idea. Attack, tantrum and accidents are good example of that.
So no, it doesn't work, unless the whole game and interface is heavily altered.
Even without multiplayer, it would be nice if there was an option to keep the game unpaused while you designate stuff. Usually there's no reason I need it paused and I'd rather have my dwarves start working. SimCity worked this way and I found it worked quite well.
SimCity worked well because it's totally different style of game. You don't usually get situations where you have to act quickly and with accuracy, situations which happens in DF all the time. So comparing SimCity and Dwarf Fortress is not valid, IMHO.
I finally get a chance to arrive at one of these threads while they are alive!
First, I'm assuming a shared fortress.
I do not believe pausing would be a problem if you're playing with, say, a friend (you shouldn't be playing dwarf fortress with an stranger, in my opinion. Just the nature of the game). All you would have to do is say you need to pause (or just pause). You'd tell the other what you need to do, you'd do it, then both would agree that you *can* go forward. Even, you can reduce the FPS so that managing the fortress and dealing with pausing is easier, or is needed less. If you're having disagreements over pause in a game like dwarf fortress, I believe you should set up some rules, or find somebody else to play with.
Many of the issues you mention could easily be solved by simply talking with your partner. And even then it's probably best you talk about what you're doing too. I admit, it could be very chaotic for a group that doesn't work well together, but a wonderful experience for those that do.
Now, I don't think not having pause in MP would be useful. Unless you're running at 10 fps or something (and yes, unpausing while designating could be a very good addition). If anything, simply have the host (the one that makes all the computation) be the one that pauses having the others be left working with whatever the host decides.
While I'm at it, since I probably won't get another chance: you could very well have multiplayer if you had: a server that runs the game, a way of applying designations/changes on the run without having to pause nor use in-game hotkeys, a dummy client and something that transmits the game data from host to client.
It might be too resource heavy, though, working only for LANs. However, then you could have your friend see your fortress and help you manage it. Perhaps he could focus on keeping those miners working while you use the manager (ie item production) or even assign jobs to those new migrants.
And with that last bit I can address the screens that force you to make a decision: you either have the clients paused (they should still be able to designate, and make changes on almost anywhere else. Or you can have them watch how the host conducts (or the client, if the host chooses) decides so that they can be better informed.
I admit my vision of multiplayer would rarely work with strangers. It'd be an issue to play with friends if you can't agree or trust that the other knows what he's doing. Hell, it assumes you are communicating while you play, because otherwise things will quickly fall apart. I have no idea what kind of bandwidth it would require to even function in a playable way, let alone dealing with connection problems. It would be like playing Cooperative (yes, you can be the same civ) in Age of Empires 2, except you would pause a LOT more, and it would be completely different. And no, I don't expect that toady makes it (it'd be faster for me to do it myself, and since I rarely get anything done...).
Though, if you look at it, it would be both a good thing and bad thing to play with your life partner.
*is now ecstatic that he managed to contribute his two cents*