My group has been playing D&D since 3rd Edition came out. We've gotten steadily better at the rules over the years, and we're now at the point where most of us know how to make things work. We're past a critical point that I am making up a name for on the spot: The Equal Reality Point.
The Equal Reality Point is the point in which a player is able to read between the lines of a given rule system and apply normal reality to the rules.
For example:
Beginning player: What do you mean I can't draw my sword and take a full attack? I just got to +6/+1! This rule system blows!
Competent player: Okay, I draw my sword as a move-equivalent action and take a single attack as my standard.
Equal Reality player: I stumble forward, jerking my sword from its sheath and trying to catch the guardsman by surprise as I do.
Each of those players had the same character, a 6th level fighter without Quick Draw. But the Equal Reality player understands the rules and has stopped whining about the ones he doesn't like. What's more, he can actually describe what he's doing as non-game-term actions, and the other players in the group are experienced enough to know that he's within the rules. The only time that the rules need to enter the picture is if there's a question, which grows less and less often as group cohesiveness improves.
This can get tricky, because without your players spelling it out for you, you have to trust them. When Kradge declares that he's taking "Massive, reckless swings," does that mean he's power attacking? If Kradge's player is the kind of guy who only announced whether he was power attacking after looking at his rolls, this is a problem. In order to get past the rules and return to a point of creativity, you have to be willing to trust your players.
And honestly, it's easier at lower levels. The most recent Big Fight my party engaged in was them, fully prepared, in an Unhallowed Dwarven Crypt, facing a pit fiend, two gelugons, a fire giant, two frost giants, four hill giants, eight ogres, five fiendish dire lions, and a half-fiend dire displacer beast (Dire Tiger with tentacles). Before the fight even began, the party had:
Mass Haste
Magic Circle Against Evil
Spell Resistance, for SR 27
Bless
Prayer
Spell Immunity: Fireball, Produce Flame, Wall of Flame
Protection from Elements: Fire
Cat's Grace
Bull's Strength
That was a ton of new numbers to keep track of -- the party had to back out of roleplaying mode for this combat and actually describe what they were doing and what they experienced. Saying "That cone of cold doesn't get past my SR" rather than "The cone of cold leaves me untouched, save for my cloak, which is lined with frost," and saying, "Okay, I hit AC 34, I THINK, is prayer still on?" instead of rolling, telling me the AC, looking for my body language to tell them hit or miss, and then describing their action with flavor text.
So, like I said, it's an ongoing process. In some ways, we're there. In other ways, we're getting their. Tom, you sound like I felt about half a year ago. I got tired of players questioning my decisions, and started doing more and more nasty stuff to them -- confounding them with as many templates and special powers as possible on a given monster, giving everything levels, etc. Then I realized that all I was doing was ratcheting up the arms race. After a few long talks, we're getting to the point where the players feel creative, I feel relaxed and unattacked, and we're working within the rules, so nobody gets preferential treatment for being arrogant or sucking up to the DM.
-Tacky