I have been playing on the server for a few days now without problems (except for the occassional crash) when along comes a cheater with Titan decked with 6 Nomads but still lvl 1, camping out at manhatten PK'ing everyone with some range hack. That must not have been enough cause he had god mode too. He did this for a while then the server crashed 3 times in a row. Everyone who was not docked in a base (except the cheater/lamer) lost their characters. From that point on if you logged out - you lost your characters. Not only the Alpha C's server character - ALL your characters from every server! I was in port during those initial 3 crashes and still had mine - but many people had lost everything - and still are! I returned later in the evening hoping it had been fixed - it wasn't and I lost my lvl 20 barracuda. At the time he was on the cheater/lamer used the nick "-" Just a dash without the quotations. I can honestly say that this is the last time I buy any game associated with microsoft. The same thing happened with Dungeon Seige. It was too easily hackable and ended up ruining a great game. Despite efforts, the problems were never solved to this day and I'm afraid this will be the case with FL.
I'd also just like to say that the idea of a new character for each and every server for modest cheat protection was a bad one - now those who play legit stand to lose everything while the cheaters lose nothing.

This game was not developed by Microsoft... they are just the publishers. They had nothing to do with why the game is too easy to cheat on. That said, I don't know of any games where people are not able to cheat.

I understand that microsoft wasn't the developer - only the publisher. I also understand that every game that has been installed to my microsoft games folder has been so easy to hack/cheat that it has totally ruined the games online potential. This is why i said "associated" with microsoft. To me, any association with them, development, publishing, or otherwise - now raises a red flag. Developers and publishers alike only seem to respond to issues if people stop buying their products. The industry may not be able to stop all cheating and hacks, but it could make it harder to do so. We'll just have to wait and see if the patch resolves this.