This is a bit more complex than I initially through. Spatial movement is such a basic thing, so I want to get it right.
My own thoughts:
Exits descriptions on a seperate line? Each exit description on a seperate line? Or should I keep it as part of the general room description?
I see two opposing goals:
Making the exit listing clear and structured, for easy navigation.
Writing engaging and flowing prose, which the reader has to decode.
In some cases, it makes most sense to begin a sentence with the cardinal direction, and end it with a location description. Other times, putting the location at the end of the sentence makes most sense. I think it would be smartest to stick to one of these, at least in a single room description, to make them have the same rhythm: The diner is north. The firestation is east. The other firestation is southeast.
In what order should the exits be listed? No idea. Maybe starting with north and going clockwise? Maybe dependent on the exit locations somehow, like beginning with most intersting and always ending with exits leading out?
If your priority is making it easy to navigate from room to room, then I suggest a discrete exit listing. If getting the player to really understand and picture the space is more important to you, then I suggest integrating the exits into the room description instead.
Either way, here are two ways to make player lives easier:
If someone tries to go in an invalid direction, give them a list of valid directions, rather than just a “you can’t go that way”. Rather than handwriting this, I usually use a “repeat with thataway running through directions” system in Inform 7 to make these lists. (Exception: Ollie Ollie Oxen Free, where the list is indeed handwritten for every room.)
Include an EXITS command that players can enter to view their current list of valid directions. Even when you have a discreet exit listing, it’s sometimes nice to have one of these, because it means players don’t have to scroll back to the room description.
The prose must not suffer. Write an engaging prose, however you want, but you can also put an emphasis on each exit description and include EXITS command or some interface box to repeat the available exits.
You can have exits described as a part of location text, but also list them in status bar(for example TADS3 does this by default). Some games have a compass in their status bar, which is probably even better.
I also like solutions already mentioned here by other people: exits command and meaningful response for going in invalid direction, which lists possible exits.
The cardinal map is an abstraction! A crutch used by the player to easier navigate the spatial environment brought to life in the room description. This is why I’m not so keen on moving the actual navigation away from the room description, by adding status line compass and such. The compass-&-map metaphor should only be used to understand the environment - it should not be the environment. Attention paid to the map takes attention away from the environment.
But it do make sense to give the player some directional hints when the he walks into a wall. (I see this as akin to the hint system in casual HOGs, where it isn’t as much cheating as it is taking a shortcut around something which wasn’t supposed to be a real challenge to begin with.)
Allright, back to the rooms exit descriptions. I think its optimal if the direction description hints of what lies in that direction, without telling it directly (“You hear flowing water from an opening in the north wall.”), or maybe let the environment evolve gradually, so that things get warmer, brighter, cleaner, more alive, the closer one gets to Joddling Crows Clearing.
If the player goes into a a village, and from there enters a house and then goes into the cellar, He may very well go southwest-west-down-north, but on a psychological level, he is moving further into something. Such general concept - moving into, moving out of - might be somehow build into the exit descriptions.
The short answer: there are a variety of approaches to mentioning exits, each with advantages and drawbacks.
In modern games, I happen to prefer exits being mentioned in the room description (option 2, to use your list). However, I’ve played some perfectly good games with exits listed on the status bar, or otherwise “outside” normal gameplay, and that’s fine too. As long as the (non-hidden) exits are fairly evident without being too obtrusive.
I favour exits to be described in the room description. Where there is a degree of obfuscation, I find the ROOM HELP concept most useful - i.e. Each room can (may not) have a help text which anticipates player difficulties, and summarises a few options.