How about this:
Let's take a look at the martial characters first. No matter the level, they've feared the natural 1 from the day 1 and still do. There are some ways to make natural 1 softer (Luck Domain etc.) but still, natural 1 sucks. It really does suck hard.
We've got a much simpler house-rule to deal with this problem. There's just nothing special about 1's and 20's: a 1 doesn't always miss (or fail a save) and a 20 doesn't always hit (or make a save). No more epic warriors missing 1 in 20 of their attacks. No more gangs of 1,000 peasants dual-wielding light crossbows to take out dragons.
Some people won't like this, and I really do get that - in particular when you have high-AC characters wandering with undiplomatic impunity around a battlefield - but as it primarily affects the game in favour of people who make attack rolls for a living, it has worked well for us. Maybe it detracts a little from the excitement, but frankly if you're staying anywhere near the curve then a 1 is going to miss and a 20 succeed
anyway until levels where it hardly matters.
I've no problem with the dragon having a small chance to miss the kobold or the peasant having a small chance to find a chink in the dragon's armour, but 1 in 20? Way too big a "small chance" for my tastes and I'd rather see the possibility eliminated altogether than come up that often. That's pure personal taste/opinion and I'm not defending it as anything else.
Various groups I've played with over the years have used variants on this theme. The first time I ran across it, they ran "1 equals -10 to the total, 20 equals +10". The same group moved onto "reroll on a 1 and deduct 10 from the second result, reroll on a 20 and add the result to the first 20".
Another variant I've heard of is "1 doesn't always miss", but only as a free class feature for characters with a BAB of +12 (I think it was +12 anyway) or more; the idea being that Wizards and Sorcerors don't get it unless they multiclass or find a PrC with better-than-usual BAB*. Another guy I know who runs a group across the country has a "reroll all 1's on attack rolls" feat with Weapon Specialization as a prerequisite, essentially limiting it to Fighters or Warblades.
I'm sure there are a zillion approaches I've yet to come across.
Frankly, I've been expecting the Law of Unintended Consequences to come and bite us on our collective behind since the house-ruling away of "special" 1's and 20's, but in four years of playing the rule it never has.
As an aside (well almost), I hate, hate, HATE critical fumbles. Once again, this is purely a matter of personal taste and indeed I enjoy them in games that are genuinely out to get you (e.g. Cthulhu, Paranoia) but I really loathe them in D&D. I know it's always a mistake to bring real life into it, but I and the rest of my current group have been mediaeval re-enactors for 8-15 years apiece and I think that has an influence on how we feel about it.
In all that time, in the tens of thousands of sword-swings we've taken in melee or the (probably) hundreds of thousands of shots we've taken in archer blocs or in competitions, none of us have ever dropped a sword (unless we've actually been disarmed, which is different), stabbed ourselves in the face or stapled our own feet to the floor. The worst I've ever seen happen is a longbow snap mid-draw during a speed-shoot, which notably failed to result in innocent bystanders getting an arrow through the head or any other situational comedy.
I know this isn't the same as a "real" battle situation in terms of pressure (although, hell, I've seen people get really badly hurt) but in my experience, the chance of a critical fumble happening for a trained martial artist of
any stripe is so low that it's fundamentally not worth including in a fantasy combat system.
*Yeah, I too could see that making Abjurant Champion more popular
