Neverwinter Online is based on 4.0.
The Dungeons & Dragons 3.5 rules are the basis of nearly all of the game mechanics in DDO. That being said, the D&D ruleset is designed for PnP gaming, not online play, and they will be making changes to the rules where necessary. Turbine’s design goal is to stay faithful to the rules and spirit of PnP D&D, while ensuring that D&D Online is a fast-paced, exciting game that’s fun to play.