There was something in Dragon that I believe you had to shove Xp into the sword over time to level it. Something like that.
I honestly don't think PCs should have to sacrifice anything to have their sword "grow" with them. That is, besides the appropriate wealth subtracting from the estimated wealth you would have to give the fighter to upgrade his sword or armor a plus.
I much prefer this method to "Oh hey, a magic sword. I'll chuck this Swiftwind, ancient blade of the elven duelists, slayer of aberrations, blessed by the hand of King Kanatha himself, because this new sword has a better plus!"
It would make me far happier if PCs had access to only two or three magical items, those items stayed with them their entire career, but made up for it in having a few varied effects. So that when you said "I have a magic sword", the response is What does it do?"
[/rant]