There is no 'setting' like that, however it should be fairly easy to implement it (just triangle detection) however the terrain is only ONE possible collision scenario.
What other collision scenarios exist? It seems like if I have a flying mount like WoW, the only thing I really have to worry about is if they are on the ground or flying.
For an alternative view - look at what Hamsterofdeath has being doing for collisions
theprism said:
For an alternative view - look at what Hamsterofdeath has being doing for collisions
Does he have his source code lying around somewhere?
No, and he is still undecided at whether his project will be open source or not. However, there has been a fair amount of discussion about collision avoidance/detection in games in the forums…
And regarding your comment about only detecting terrain collisions, what about flying through a tree or castle which is not part of the terrain, is that OK? 
Trees I wouldn't mind THAT much… a castle would be… annoying.
Yup… thats what I meant.
once you go 3D you have to do collision with the entire geometry of the world (or at least bounding volumes if your willing to go approximate, but generally thats not good enough. Its okay for a first-cull but then you need to do tri v. tri on things where the boxes collide.)
At that point, you've done more then half the work of a full physics system…
So you're basically saying "screw flying, dude"
Well im saying it makes your work a lot harder and puts serious additional load on the server.
The flip side is that the freedom of motion physics based blocking and movement gives you is pretty damn cool. if you've ever played City of Heroes, you can "feel" the difference between that and just about all the other MMos out there that are 2.5D.
Well for now I think I'll screw the flying. I need my game to be done in one year, not three, and I also need it to run like 5 players off of a computer so that I don't have to buy a server in the beginning :).