[imported_Kamos]

I didn't really understand what you meant with:

I want to recreate the UO client with titan quest 3D

But there is already 3D UO client on the works. Check out Iris2. You could maybe contribute to that project instead.

We need to decide what file format to use, what rendering to use, and if we are using a 3rd party GFX lib, or going straight for DX(so far it seems like DX is the thing to go for).

If you are still going to make one of your own check out OGRE 3D rendering engine assuming you are going with low budget. It does seem like a huge project for the artists. Good luck with whatever you choose to do.