My advice DM to DM is if you really want to give a player an iconic weapon, make it a minor artifact and blow away the standard rules for making the item. Instead of worrying about its value, stick with something that you feel you can live with even if its theoretical value is above what a player of that level could obtain. Go broad instead of deep.
Runewander
+1 Keen Anarchic Cutless
Runewander is forged from an unknown substance which legend has is cold forged nightmares from the plane of limbo.
{Unique Substance: Cold Forged Nightmare - Hardness: 28 Hitpoints: 20, regenerates one hitpoint per round. Runewander is immune to damage from acid and rust, and immune also to the disentigrate and disjunction spells. Runewander is treated as cold forged steel, magic, and anarchic for the purposes of overcoming DR.}
Its appearance is as of shiny bronze, but its surface is inscribed with what appear to fine lines of green forming at first glance some runic alphabet. But these lines shimmer and wave in an uncanny fashion as if they floated on the surface of some fluid and never appear in the same pattern twice. The pommel of the cutless is shaped like a screaming skull and has two small green gems of an unknown type for eyes.
{Lawful characters that touch Runewander or which closely observe the blade for longer than 1 minute are effected as by an antipathy spell (caster level 15, DC 22). In contract, a chaotic character which grasps the hilt or which closely observes the blade is effected by a like strength sympathy spell. }
Runewander radiates strong chaos and mild evil if tested for. Despite is obviously arcane nature, it does not radiate magic nor are its power discernable by any form of direct divination (identify, ect. fails). When tested in the hand it feels well balanced and it appraises as a weapon of masterwork. Its blade is extraordinarly sharp and never appears to dull.
Runewander possesses many strange powers. The following known powers may be evoked as standard actions by those which learn the secrets of the blade.
3/day: Magic Circle Against Law (caster level 15, DC 17), duration 150 minutes or until the wielder leaves the current 5' square.
1/day: Fear (caster level 15, DC 18).
1/day: Nightmare (caster level 15, DC 19). In addition, whenever this power is activated successfully, the caster gains temporary hit points equal to the damage caused to the target. Damage sufferred by the wielder are first taken from these hitpoints. These temporary hitpoints are lost at the next nightfall.
1/day: Dancing, as the ability, 4 rounds duration.
Intelligence, its own agenda, subtle curses (other than the above sympathy) and other surprises are optional. The great thing about minor artifacts is that if you want to change the rules at a latter point because the object isn't as great as you wanted or is getting out of hand, you've got lots of tools for balancing it. Mysterious new powers or curses can emerge spontaneously, over time, or as the character increases in level.
