I have always felt that there is a disconnect between heroic fantasy (whether in literature or gaming) and the notion of a +1 sword typical of D&D. Now don't get me wrong, I have played a lot of D&D, over multiple iterations of the game, and had a lot of fun.  But I have never enjoyed the way that the system turns magic and magic items a mundane "work-a-day" concept.

I understand "why" it was done. I mean, if you want potion shops on every corner, and low level player character wizards scribing scrolls and making magic items, they have to have low level items like scrolls and +1 swords to make.

My idea of magic (especially as represented in the form of magic items) is that it should be more rare, more powerful, and more mysterious. I don't mean that I want to cripple player character mages. I think that the Galdrmadr and Seidrmadr of my Ragnarok RPG are just as potent as any of the fight-ier character types, powerful and mysterious in completely different ways - and as beginning characters. They literally can do things that non-mages marvel at - summon spirits, predict the future, even alter it. I want to give them their own area of competence, just like a Berserker  in the swirl of melee, or the jarl at the fore-front of battle surrounded by his thegns. 

And that is undermined by a +1 Sword.

What do I mean by that?

I don't mean that +1 swords are too weak. I mean they are without character and mystery. They cheapen magic, and by extension, those who practice it. With that in mind, here are a few ideas on how to make your magic weapons matter.

1. Name: A +1 sword is boring because it goes straight to the game mechanics that we, as GMs and players, try to avoid thinking about as much as possible. Alboin, a +1 Sword, becomes more interesting and memorable judy by having a name.

2. Description: The problem with generic things is that they are not special. To make any item special, it needs a certain degree of uniqueness. Alboin, the +1 sword, is a straight-bladed spatha of fine steel, with a worn leather grip, and a disk-shaped pommel of silver and niello.

3. Background: How did the player find the weapon? Where did it come from? Who had it before? Who made it? For what purpose was it forged? Not every question needs a grandiose answer. You don't want a golf-bag full of weapons forged to spay the demons that will return to consume the earth in fire (unless you do). But a sword forged by a father (who was not known to be a swordsmith) is immediately interesting. So is one named after a king of old. Alboin is not a mistype of Albion, but named for perhaps the most famous king of the Lombards. In a game with Lombards in its past, the generates questions and answers immediately.

4. Make your +1 sword matter: OK, it is a minor weapon, right? but +1 is kinda boring. So how about +1, but it gains a minor bonus in a special, and somewhat rare circumstance. This could be a bonus to its attack chance or damage vs. trolls, or whatever. But it could just as easily be something that does not boost its combat power, or even something non-magical. Alboin might be recognizable as the sword of venerated king of old, granting a bonus to social interaction with those who recognize it. Or it might be imbued with a sliver of Alboin's spirit - enough to allow the wielder to rally a group of men whose will to fight is faltering, or to grant its wielder a bonus to his Ancient Lore skill, or allow its wielder to ask the spirit of the sword a question about the past. None of these are game-breakers, all of them provide ways for the GM to deepen the world, provide plot hooks for adventure, and all of them make your +1 sword something that the player is going to want to hang on to.

One of the ways that Ragnarok deals with magic weapons is to make them something that a player character can begin play with. By taking the Talent: Artifact, a player gains a unique item (which could be a sword) that is probably magical, or special in some significant way. Together with the Sagamaster, the player works out the item, basically going through the checklist outlined above to create their artifact. They also have to record the Deed by which they acquired the artifact as one of their points of Renown, which NPCs in game might well have heard about. All of which enhances the artifact and the character's connection to it.

Another way that I reinforce the idea of magical weapons is in regard to Valkyries. Yes, you can play one in Ragnarok! A Valkyrie in Ragnarok is trapped on Midgard, cut off from Asgard after the Rainbow Bridge is damaged. But she is still a force to be reckoned with. Her divine nature and magical potence allow her to effectively enchant any spear she takes possession of while she owns it.

What does she do? She gives it a name. And by naming it, it becomes loyal to her, returning to her hand if lost or thrown.

So: Does the above treatment mean that really powerful magic Items are less special? I don't think so.

After all: Mjolnir, the Thunderous Giantslayer, was still crafted by the dwarves at the insistence of Loki, who was tryig to keep Thor form killing him after he stole Thor's wife Sif's glorious golden hair. Making your magic items unique does not threaten that. it just helps the players understand that their character are part of the same milieu.

As an add-on: check out Will Thrasher's d10 Weapon Flourishes for ideas that can further personalize your weapon.