Good work!
I've some suggestions, though. They may seem to be "minecraft-ish", but I'm not trying to copy that game. Just agreed that minecraft has some nice points about Nether:
1. Nether realm should use blocks below 20000 (No one would dig that much, so Nether wouldn't replace caves and mines)
2. It should be generated alongside the world generation (maybe it's already does, so forgive me)
3. If this mod had been installed AFTER the world creation - there should be a dialog (I believe that's possible using formspec) with yes/no alternative. If answer was "yes" then Neteher should be generated.
4. Nether should use all blocks in the area of {0,-20000, 0, 32000 -32000, 32000}, not some part of it.
5. Portal location in the Nether should be at the "same" position as the portal in the upper world. X and/or Z coordinates could be swapped, but Y should remain the same. In case there''s no room for a portal in the Nether - it should be created in the nearest position with enough room for it. Maybe some "alter" function should be applied to the X and Z coordinates.
6. There should be MORE than several portals. (I've got only ONE despite over 1000 blocks between the portals in the upper world)
7. Portals should use less space. Make the purple whirl block thiner and remove unnecessary obsidian. Yes, at this point minecraft portals looks more aesthetic...
8. Maybe display some formspec when stepped inside a portal - player can wait while Nether being loaded
9. Once we'll get mobs - add some Nether-beasts
10. Current Nether looks a bit too "hole-ish" like a chiese or smth. I thing that Nether should look more, like a cave with lava lakes, lavafalls, hell-ish glowing objects and so on.
At this moment I can't recollect any more, but once I did - I'll make a post here