I am, and always have been (since the Blue Box) a fan of sparingly used cursed items and adding quirks to otherwise "good" items.
IMHO, magic should be mysterious, possibly dangerous, and somewhat unpredictable. The occasional cursed item helps players to "get" that just because it says "Healing Potion" on the label, it doesn't always mean that the potion will heal you. Potions of delusion, IMC, are simply poorly made potions that offer a seeming effect, but actually do nothing.
Likewise, I enjoy meaningful choices in a game, and where something has both benefits and drawbacks, characters gain meaningful choices. If the sword does some neat things, but the wielder becomes a werewolf on nights of the full moon, is it worth the risk? Can't we just lock Fighter Joe up three nights a month? That's just fun stuff.
Quirky things, like possessing an item that slowly turns you into an albino, is also fun. There's no mechanical drawback, but there is a real WTF moment, and some decisions to be made. Again, fun stuff.
It also makes the straight "good" items more valuable, and adds that little bit of doubt about what a given item can really do, or really does, that is (IMHO) necessary to making magic items more than simply equipment.
YMMV.
RC