easy way out
Alternately, you can take a totally easy way out and if you just want some side effects from a powerful magic item, you can have them be subjected to an Insanity spell (duration permanent, random action every round). If you wanted something more encompasing, just pull the character aside and ask them to roll play it. Give them their "madness level" each session, which in theory should be slowly increasing, and see how well they play it. You can give them bonus experience for good role playing so that if they ever get rid of the madness they still have the experience ... could be really fun for everyone.
I find this ends up being the most entertaining types of situations ... my players love (and hate) it. It's no uncommon for one of them to fall under the influence of mind control secretly and then they have to roll play in such a way that no one else find out. It's great fun all around, and can really test their roll playing skills.
I'm running my characters through a temple of chaos right now and there are a lot of madness types of traps and spells. I used a lot of Confusion and Insanity spells to make it easier, but there are also templates they can pick up.