I generally stick pretty close to the rules like many others, keeping the limitations of Identify and Analyze Dweomer, but with a bit of work, I can let players find out through pure research. Using Spellcraft, especially along with Detect Magic, a character can at least determine the school of spells involved in the item's abilities, and that might give a good bonus to Knowledge (Arcana), for instance, or just pure research (taking 10 or 20 where appropriate) can lead to good positive identifications. I might set the DC appropriately high or low depending on how common or rare the item or abilities might be. Heck, for some things, especially for artifacts, I'll even let a bard use his bardic knowledge ability, with the DC set based partly on the item and partly on how much they have found out so far through other means. Usually, though, my players don't need to go so far for identifying things, they usually just pay some NPC to do it for them. :Þ