One of the advantages of Minecraft executing my idea is that I have some texture packs to experiment with. I will draw my own textures soon, but these are from the Painterly Pack.
Last week, I completely rewrote my rendering engine. I divided my world into chunks and when the player is not nearby a certain chunk, it will be compressed and stored into a vertex array or a VBO, if the GPU supports it. I got a very good performance on my MacBook Pro, with no hiccups at all. But before I make bold promises, I will generate some more interesting worlds to see if that performance still holds.
When this becomes playable, I will put a java applet on this site so you can try it yourself. Stay tuned!