der_kluge
Adventurer
Nyarlathotep said:I gotta fourth the recommendation for the Artificer's Handbook. It's about the best magic item creation system that I've seen for Third Edition.
psst, your check is in the mail.

The Artificer's Handbook (no, I don't make any money on the thing.. and no, I'm not bitter...) has a completely different system for magic item creation. It's sort of like a toolkit for magic item creation and has a "core" system called the spell slot system which it uses. It comes complete with a formula for magic item creation to generate a more precise cost versus the more arbitrary system the DMG uses.
Insofar as the XP costs go - here's a concept - just don't require an XP cost! Instead, make the players find unique components. It's not a simple matter of just turning gold pieces into magic items. And even if it were, they'd run out of gold eventually. So, even that's not that big of a deal.
The only time I can conceivably consider that such a system would be a problem is in the "meta-game". Where, you could envision a lich with untold wealth sitting back creating +1 rings of protection, +1 swords, and low level potions all day, every day. Crazy yes, but if your liches are that bored, you've got other problems in your campaign world.
Most of my games have never gotten high enough level to even make it a concern. So, I smiply don't worry about it. My players also understand that they just can't go out and make just any ol' thing. They need specialized components, so they tend to hoard oddball stuff when they find it.