Yeah, each day the backup is restored to one of our testing realms (we have several for different purposes). Because we don't know the passwords on players' accounts, they are overwritten on the internal realm with a default password so that we can access them.
All of our changes are tested with real player characters at the appropriate levels before they're deployed. We learnt the hard way to not bother fabricating our own characters to test with - we can never get the items quite right. Using a gauntlet of real characters really helps us make sure that it's roughly balanced correctly.
Occasionally we find out interesting things. For example, a long time ago (when the game was a lot easier), a player commented that the game was too hard with one of their characters. When I investigated by playing on a copy of that character, I found that he was using white gear and had a stash full of currency items that could easily have made his lethality and survivability twice as high with little economic cost. We were able to see that he valued hoarding his currency more than being able to progress through the game
