First off, if any readers haven't read Monty Cook's
essay on the sacred cows of D&D (or D&D-isms, as he calls them), please do. I think it should get the thoughts flushing. If the link doesn't work, its archived under "Line of Sight".
My 2 cents is that Levels, Classes, Spells and Races bring a little order to the completely freeform games of "lets pretend". They make the game manageable, and also manage expectations so that players are more likely to get along.
Now, I think there are plenty of other ways to handle Hit Points and Armor Class, but the way it is now is just plain fun. If the number of HPs never increased too much, you could never walk up to a Hill Giant, unarmed and unarmored (except for maybe a plaid kilt and your trusty pen-knife), and spit in his eye.
(If you have to, go read that last sentence one more time. Make sure you have that visual well established.)
That's why I like D&D. The sheer chutzpah that massive HPs give you is a glory to behold, and darn fun to play, IMHO. My Uber Fighter can take more punishment in a ratty t-shirt than your lil' punk in the best armor his daddies money can buy him, and that's the way I like it. Its a flava' thang.
Ken Hood put together an awesome rules set for that Grim & Gritty feel, but it engenders a level of paranoia I am not interested in for my games.
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As for my 4th Ed., I would make sure that the base classes are truly unique and cannot be recreated (or bettered) with combos of the others. Right off the bat, this means the Ranger and the Paladin should go. Don't go to four classes though, because the Monk, Druid and Barbarian cannot be created with combos of the "iconic four". Same said for the Psion.
I think I would replace the Cleric with the Priest, who gets lots of Divine magic, but no weapons and armor. If you want to be a Holy Crusader, take some levels of Fighter or Barbarian.
Oh, and for the love of God, put Psionics in the PHB. Its been around for so long that everyone has made their mind up about whether or not they want it in their campaign. They can continue to make the choice to exclude them if they want (just like I exclude the Ranger), and the rest of us have all the rules we need in once place.
I think that's about it. I would love to see a more free-form Magic System (like Ars Magica or Mage: The Ascension), but I know that will never happen, so lets focus on the probable and improbable, not the impossible. Maybe we could make it a little more flexible. Metamagic is a good step in the right direction.
Irda Ranger
PS - Psion, pennywiz deserved that to some extent, but you're one of our community leaders. Don't stoop to his level.