I'm not sure quite how they'd impliment this in DDO, but I heard once that FFXI had an item that would drop your character's level down to a lower level, so you could group with friends at lower levels.
I think this sort of thing would come in quite handy.
For example, I have a friend who's working his way through TR lives. I don't have as much time to play as he does, and I happen to be in the dupious position of having only characters who are 9 and bellow, or 18 and up. My buddy could really use some help getting through the 13-15 levels, where I have no characters even close.
I think, given the massive storage issues with the game, it would be best to make it a spell cast by an NPC. For practical reasons, this spell would have to persists through resting and death, and expires on log-out. The spell would reduce your character level to a given range. You'd have to have level appropriate gear, and you'd loose access to any stats/spells/feats, etc, but for the occasional "run a friend through X dungeon" it would work.