I was thinking of the same idea last summer, but then I didn't try it.
Grayhawk said:
My particular reason for doing this, is that I run a slightly lower magic game, so I thought this might somewhat compensate for the lack of items, etc.
Well, if your players spend the extra feats to get Item Creation feats, then they will in fact have more magic equipment

but since you also slow the Xp gain rate they will also be careful not to spend too much of them.
Grayhawk said:
Also I have slowed the leveling progress by dealing out less xp, meaning more play time at each level. As such I thought it might be nice to grant feats more often, to make the players get a greater benefit when they do level up.
If you count the whole 20-level progression, a feat at every odd level results in every PC getting 10 feats (plus the bonus ones from race or class) instead of the normal 7 feats. It is NOT overpowering. IMHO it is a good way to promote the players to take a couple of less popular feats without feeling like "wasting" them...
Grayhawk said:
If I'm only using the core feats from the PH and a few custom feats, will characters run out of usable feats too soon?
There are enough core feats not to run out of them. Maybe the problem could be that almost all of the core feats are general, combat, metamagic or item creation. This means that for example there are very few core divine or wild feats, and characters such as Clerics and Druids will have after all to take combat feats or metamagic or item creation... which will make them necessarily lean toward fighting or toward magic, and far away from their unique abilities.
Grayhawk said:
Will the greater number of feats dilute the sensation of getting one?
Really not

IMXP a character never gets enough feats! If you also allow players to take PrCls, those extra feat will be a welcome help to meet prerequisites AND still be able to differentiate yourself from other member of the same PrCl.