Er, D&D is a high-magic game. I didn't like how 3e made it a "commercialized magic" game, what with straight gold costs for "any magic item you feel like" (and I am hopeful 4e will fix this) ... but I wouldn't propose many of the fixes discussed in this thread. Not for the Core Rules, at any rate. I've got Iron Heroes and Grim Tales if I want to go that route.
Also, as hong said in the first reply, a good action point system that lets PC's roll again, or add to their roll (a lot), fixes a lot of problems.
The "problem" I think some people have is that certain spells are incompatible with their campaign setting or the tone they are seeking. You could ban these spells out-right for that, and I think that may be the best solution for your campaign. For example, getting rid of Plane Shift and Astral Journey (or whatever it's called) would keep you players on the Prime Material (except under unique "plot hooky" circumstances). That's a perfectly legitimate GM's call when designing his world/game, but that doesn't mean those spells shouldn't be in the Core Books.
Another problem I think some people have is just that they don't like high-level play. Impose an XP penalty equal to the character's level * 10%. Done.
Since this is a game, there is only one kind of "game breaking" spells, IMO: spells that make the game un-fun. There are several ways to do this.
1. The spell is boring, but necessary to cast repetitively. I'm looking at Magic Missile, Shield/Mage Armor, and their higher level counter-parts. I am looking forward to 4e's at-will powers that I expect to replace these thoroughly.
2. The spell is a 'no brainer', tactically speaking, but 'useless' in the sense that once both sides have it, it cancels out. I'm thinking Haste and Fly here, as well as certain stat-boosting spells, but there may be others. I'm not interested in playing an arm's race. Spell tactics should always be 'interesting', like gambits in chess.
3. A spell (or spell combination) that, in the hands of a rational enemy, guarantees the PC's an un-heroic death. I'm thinking of scry/buff/teleport here. Throughout their career, PC's will make enemies. They also sleep. Combining these two facts makes Neumann and Morgenstern sad puppies.
To flesh this out a bit, the reason s/b/t is bad is because it can be used against the PC's. And I am of the opinion that any real opponent will use all resources at his disposal. Have the PC's made an enemy of the <insert powerful organization with magic users>, enough to catch some high-up's attention? There's nothing from stopping this high-up from hiring a competent-but-expendable 1st level Assassin, buffing him to the gills, and teleporting him into the PC's bed chamber while he's sleeping. It's not a guaranteed kill, but your enemy only needs to get lucky once. To an Evil Organization Big-wig, Assassins are cheap. The assassin would of course have instructions to bring the PC's head back with him.
Since I like to make things 'more magical', rather than ban spells, I would prefer to leave in Teleport, but make it useless for the s/b/t tactic. Some of my favorite fixes are "casting Teleport has the side effect of casting Dispel Magic on yourself" and "Teleporting people spend 10 rounds in 'telespace', a temporary demi-plane without light or gravity, during which time a point-of-light slowing grows from 1" to 6' in diameter emits a keening hum impossible to ignore at your intended destination."
4. A spell that makes another class wonder why it bothered to show up. There are half a dozen cleric spells that are particularly troublesome in this regard, but others have mentioned knock, so I'll admit it's in this category.
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Personally, I am not a fan of many of the solutions in this thread because they're either solutions to "problems" that only exist in a particular poster's campaign expectations, or the solution makes the game less fun & magical. As for me, I like solutions that don't take the magic out of the game, and increase strategic choices. However, I have found that a few simple changes to a few spells keep them from over-powering the game; but I don't claim to have any 'one' solution for any given spell, since there isn't any. I can only tell you some things I've tried.
Teleport: see above.
Fly: a dozen ways to fix this. Making it 'Concentration', so you cannot use it and cast spells at the same time, is a good one. So is reducing maneuverability.
Knock: grant a +10 to Open Locks, which does not stack with real skill points. This allows you to get out of most jails and pick most hand-cuffs, but not break into high security vaults. That's what the Rogue is for.
Scry: cheap counter-measures. I like "Herbs of Privacy." Any village herbalist can sell you these for cheap. Set them in beeswax for a candle, or stuff them in a lamp's oil reserve. Anything that occurs within the light of one of these treated items is 'blind spot' to Scry spells. Only the super-rich and paranoid have these running 24/7, but this allows anyone (including the PC's!) to have a private conversation.
Zone of Truth/Discern Lies: I usually ban these, for two reasons. One, it makes a lot of Skills useless (including all those ranks in Bluff!). Two, 'Truth' is a funny thing. Only certain maths have been 'proven' to be true. Pretty much anything else is subject to interpretation, so even if the spells worked as advertised, the most you can say is that the target believes it to be true. "Vader betrayed and murdered your father." This makes these spells 'over sold', and disappoints a player's expectations. Better to avoid that. People better know what to expect with normal Gather Info, Diplomacy, etc.
Save or Lose: Frankly, I don't mind that HP's become meaningless. There's more than one way to skin a PC. I expect players to seek out the enemy's weaknesses, and exploit them; and they should expect the GM to do the same. NPC's would be fools to try to wear down the Barbarian's hit points with a frontal attack, not when they can attack his Will Save and/or hold his favorite little sister hostage. Similarly, any NPC who gets in a
Fireball duel with a Wizard at high noon is an idiot. A Save or Lose spell is not bad per se, only if it cannot be intelligently countered (i.e., with good prep work, not just a die roll). In that instance it may violate rule #2 or #3.