Magic Items, worst, silliest, most power gamey you have seen.

[Hand of Evil]

Helmet of Cure Light Wounds - it was based off the "beer hats", has a couple of holders for cure light wound potions and a tube for the character to suck the potion during combat.

About the silliest I remember.

 

[Wednesday Boy]

My friend and I joined a new group for a 3.5 game and the GM gave out custom homebrewed magic items to all of the (first level) PCs. My friend was playing a dwarf and the GM gave him a ring that made him invulnerable to metal. The dwarf got wallopped by an orc in our first fight so my friend reminded the GM of the ring. The GM paused for a moment, read the magic item description (which was as detailed as "Metal can't hurt you when you're wearing this ring."), then reduced the damage to zero. Aside from a few natural creatures the rest of the combats were unchallenging and soon after we departed from the group.

 

[Evilhalfling]

Cube of (ir)Rational Thought

A rubics cube device that allowed me to selectively disbelieve reality.
IE every time I said "i think its an illusion, I disbelieve" If I made the save, it was an illusion for me. Since my character was a sophist it fit him perfectly.
But like wishes the cube seemed to get me into more trouble than it ever got me out of.

disbelieving an attacking monster, ment I stood by uselessly while the rest of the party got creamed.
disbelieving the wall of a tavern, removed the entire tavern. I could either sleep in the rain, or separate from the group (while on the run from assassins).
disbelieving the prismatic sphere of the villain got me a solo fight with the villain. um yay?

 

[Lord Ipplepop]

I think my favorite homebrew treasure was an evil bit that the DM tossed at us one night.
The group I was in at that time had 4 DM's. The one who started the campaign tended to make the monsters very easy to kill and and very magic heavy. As players we got complacent. One of the DM's ran an adventure wherein he gave the cleric a magical mace.
For whatever reason, regardless of the damage the cleric rolled, his opponent NEVER died.
We had come across the infamous Mace of Healing. Instead of doing damage, the person/creature struck received as many hit points as damage rolled.

 

[Smoss]

The "Apocalypse Stick". Seemingly a small twig held by a frail, blind, crazy seeming old man...

"Get back or I'll hit you with my apocalypse stick"

Of course, it really WAS just a twig. The crazy man was just a powerful (now insane) psionic. Amusing to have PCs try to figure out how to use the twig. It had been unbreakable in the fight (psionic boost of sorts there) - but just a regluar twig outside of combat. It befuddled for ages...

Smoss

 

[The Shaman]

Ring of trollish regeneration

This cursed ring regenerates lost hit points at the same rate as a troll's regeneration; however, each time the ring is used to restore hit points, the wearer begins to turn into a troll: the weater's flesh turns green and warty, the nose grows, the fingers and toes become more talong-like, et cetera. If the wearer regenerates a number of hit points equal to the character's total hit points, the character is completely turned into a troll, and the ring falls off.

The wearer also takes + 2 damage from fire or acid.

The ring can only be removed with a remove curse. If the ring is removed before the transformation is complete, the former wearer slowly returns to normal once the number of hit points equal to those lost and regenerated while wearing the ring are again lost and replaced.