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Personally, I'm hoping for AoE affects everyone, including the caster, if in the radius of effect. It's how my gaming groups have played from AD&D through 3.5 and Pathfinder. It tends, in my experience, to improve tactical use rather than "blow the world up until we're all that's left" type play. Taking it to the MMO world, it would limit balance issues of mass AE grinding.
It would still be a valid tactic in certain cases to blow a party member up with the enemies. (or mesmerize, stun, root, snare, charm, etc...) However, it would require more thought than "Tank gather X # of mobs, dps all spam "3" until dead" on average. Just my vote. I know there are others who would prefer differently. Perhaps this will be one of the votes. Great topic.