Everyone will start on 'a' newbie island when the MMO launches (clearly large numbers of players will require multiple instances of it). Coincidentally, newbie island and the island in YO are the same. Everything on a newbie island will be reset daily, as these are meant to be temporary play areas.
The purpose of newbie island is to introduce new players to the game without requiring that they purchase the game. Those who like it can then purchase a 'golden ticket' to be transported to the main MMO land mass. It's speculation, but I imagine at that point players will be able to select which server they wish to play on as well (the number and locations has yet to be finalized, outside of the initial server in Germany).
One outstanding issue that needs to be considered (and addressed) is the fact that newbie griefers (and I am not referring to any of our existing noble player base) will likely login to these servers with the intention of killing other newbie players trying to determine if they want to play the game or not. They will run about with primitive tools and slings and, while most new players are still trying to figure out the controls, kill them mercilessly. While PvP is part of the game, the MMO will have built in penalties for 'red' players. Daily wipes and free accounts will make this moot on newbie island.