DC scales, Pathfinder & swift action for -20%
Rather than Hawken's idea of Spellcraft DCs based off of armor Tiers (light, medium, heavy), I'd vote for a system where the DCs are directly based off the arcane spell failure percentage. A high DC scale could be % as a DC (so 25% arcane spell failure means a DC 25 spellcraft check), low DC scale might be 1DC per 5% of the arcane spell failure (as it's always in 5% chunks) but that would yield DCs like 2, 4, 5, maybe 7 or 8. We could a flat rate to these as well: maybe 10 base, then add whatever.
Would asking someone to make a DC 35 spellcraft check for fullplate be so bad (more likely, a DC 25 spellcraft because it's Mithril Fullplate)? That sounds on par. I light that mages would consider defense a bit, both starting off at lower levels and also higher level defensive min-maxing. A Wizard opting for Studded Leather seems fine to me for DC 15 checks seems fine to me. By the time thoose DCs because easy/automatic, the AC bonus that armor grants isn't far off from getting bracers of armor.
I know Pathfinder is another topic, but did you guys see their system? Once you have 3 caster level and then 7 caster level (I think), you can take these two feats. The first one reduces arcane spell failure by 10% and then the second upgrade feat brings it to 20% reduction. But they are a swift action to activate, so you have to have to spend the two feats and then still every round you want to cast you spend your swift action to get the -20%.
If it was just a spellcraft check, then Skill Focus: Spellcraft and some of those +2/+2 skill feats might become mighty interesting for both speced casters and hybrid gish builds.
Sylrae, I've had a similar idea as you before by giving different items, loads, etc, cumulative penalties... but I had originally envisioned added armor check penalties rather than arcane spell failure. I suppose it could be both. I had thought that things like armor, shields, heavier loads, big clumsy items, but maybe even two-handed weapons or moving too swiftly or as negative effect of spell or poor terrain, these penalties stack up. Then, there's a chart somewhere about added negative effects such an amount of armor check might give, something like...
ARMOR CHECK______ ADDED PENALTY
-3 ........................... +10% arcane spell failure
-6 ........................... -1/4 speed
-9 ........................... no 5ft step allowed
-12 ......................... +20% arcane spell failure (replaces)
-15 ......................... -1/2 speed (replaces)
-18 ......................... -2 reflex saves
-21 ......................... +30% arcane spell failure (replaces)
-24 ......................... -3/4 speed (replaces)
Maybe the "arcane" part of Arcane Spell Failure could be changed and it could be used in more situation to be a broader aggregate of encumberence. % chance to misuse a scroll, or activate a magic item, or the target automatically saves against the spell effect, or chance for a magic item enhancement to not work when wield/worn by the character. Or derive spell failure off of armor check penalty and say arcane casters have spell failure equal to their armor check penalty per 5%, so -4 armor check causes 20% spell failure for arcanists.
Oh, and this is my first post on EN world. I think I may have been a member some years ago and let it wane. I'm really excited to find a community of 3.5 reivisionist because that's exactly how I feel.
To Summarize: I think a spellcraft check equal to the arcane spell failure % is fine. If they succeed, cast as normal. If they don't make the DC, the spell fizzled and the spell/slot is gone.