I love this! This is what I have been looking for in MU*s. It ties skill development to time rather than vague xp, and it creates projects for people to engage in while limiting them to how involved they can be. I think FutureMUD was going to have something like this but that project has gone quiet. It's also similar to Arx's investigations and tasks system, only all tied up into one streamlines system.
As for giving players benefits for playing, I have always said that if you have to be incentivized to play a game, it's work not a game, so why are you playing it?
The only bonus I consider giving players is something like "bennie points" or what Firan called CP. Turn in so many of them and you get a one to three scene GMed plot focused on one of your character's or a fancy item that doesn't give any stat boosts but looks nice and is unique, etc.