As I mentioned briefly in the Level-Up Rewards thread, I'd prefer to see the three styles on equal footing.
Sword and shield gives you defensive superiority
Two handed weapons give you increased damage on a hit
Two weapon fighting gives you more consistent (reliable) damage
This would be achieved through:
Sword and shield: Bonus to AC from the shield.
Two Handed: Bigger dice size
Two weapon: roll both attack dice and both damage dice. (Your attack dice must be tied to your damage dice. Declare before-hand, use different coloured dice, whatever) Which ever result is better is the result you keep.
e.g. both attacks hit, one does 3 damage, the other 6. Your result is 6 damage.
One attack hits (3 damage), one misses (6 damage). Your result is 3 damage.
One attack hits (6 damage), one misses (3 damage). Your result is 6 damage.
Hopefully this would balance out without the need for modifiers or penalties. I'm not sure though as I haven't had the time to check stats on it. The idea is that the two weapon fighter is going to do some damage more of the time, while the two-hander does more damage some of the time. I wonder if picking the best damage is too effective though, in which case it may be 'average of the two damage rolls' or even 'lower of the two damage rolls'.
For the record, yes I have considered the 'attack two different creatures' argument, and I don't like it. If an attack roll already represents multiple swings of your sword, I see no reason why someone with two swords is better able to split their attention than someone swinging one sword. I'm no martial artist, but the Mythbusters episode on dual-wielding pistols makes me feel that I am right on this particular point. Having two weapons doesn't allow you to make twice as many attacks and retain your accuracy. Either you miss more, or you slow down and attack as if you had one weapon.
If we don't want to model that using 3e's hefty attack penalties, I'm in favour of dropping the extra attack altogether.
From a fluff point of view -
Reg the fighter is using a sword and shield. He's fighting 3 orcs. In the space of 6 seconds he's using both sword and shield to fend off attacks from all the orcs, as well as threatening the orcs with damage by 'attacking' them. But he can only really focus on one, and it is that one he has a real chance of damaging. The chance of damaging others only happens if one of them leaves a serious opening.
Mara the fighter is using two swords. She's fighting 3 orcs. In the space of 6 seconds she's using both swords to fend off attacks from all the orcs, as well as threatening the orcs with damage by 'attacking' them. But she can only really focus on one, and it is that one he has a real chance of damaging. The chance of damaging others only happens if one of them leaves a serious opening.
What I'm saying is that you can't split your attention to attack two people without opening yourself up to serious injury. In both examples, one person is doing all that they can to kill orcs, while simultaneously protecting themselves. They are both 'attacking' or 'threatening' all 3 orcs, and this is represented in game by opportunity attacks (or whatever you want to call them in future), but in any given round they can only 'hit' one orc. [Remembering also that a hit does not necessarily result in physical damage and that a 'miss' doesn't mean your weapon failed to connect with your target]
Another way to model that would be - yes, you can make two attacks, but doing so reduces your AC (rather than your attack modifier). I don't like this option, I merely list it for the sake of completeness.