Syncaine of Hardcore Casual has an excellent entry up about how he would handle "crafting" in an MMO. The article is really less about crafting and more about itemization. I wrote two articles on the subject in which I first discussed why the WoW system is broken and then followed it up with my solution for the next MMO.
The conclusion I wrote in those articles is that itemization in the next MMO needs to include a durability system in which equipment and inventory are eventually consumed, used or broken. Syncaine's article echoes those sentiments and goes on to explain how such a system could be implemented.
Syncaine and I are very much on the same page with regards to how this would positively impact crafting. The critical thing to consider is that when equipment breaks -- it needs to be replaced. Crafted gear could be a very viable and important component in keeping yourself properly equipped. A good crafting system shouldn't be allowed to become stagnant and it's a shame that the WoW system promotes the creation of so many useless items while you level the skill. I find it interesting that my 375 Leatherworking and 375 Engineering skills can make over a hundred different items and less than 10 are worth making.
Syncaine takes the idea farther by saying that the benefit gained from a Bronze Sword shouldn't be much less than the benefit of a Diamond Edged Mega Blade. While I like the idea of narrowing the gap between the two, I would say that making the difference between them "minor" might be a bit extreme. I believe I would prefer numerous "minor" upgrades (Bronze -> Iron -> Steel -> etc.) that resulted in a pretty significant difference by the time you got to the top-tier item. Perhaps the Mega Blade is 200-300% better than the Bronze. By comparison, a WoW item can often be 2000-5000% better. So I definately agree with a scale back, but maybe not to the extreme that Syncaine would indicate.
Syncaine also goes on to paint a scenario where a warrior discovers a rare gem and then seeks out a crafter to create the top-tier item. I definately like this idea and would take it even farther, allowing players to "upgrade" existing items into more powerful items.
One thing that is interesting about the crafting system in Warhammer Online is that it is not recipe based. Instead, it seems to be based on the idea of experimentation. Mix this, plus that and see what you get. In some cases, you get what you expected and in others you get something far more unique and powerful. The "what" of what you are creating is based on the ingredients you use to make it. The reagents themselves will appear to have properties, so this class of regeant determines duration while others may determine potency.
I find this system of "mix and match" much more appealing than the standard recipe based mechanic applied in Wow. For one thing, you could still create a potion or item with similar effects even if you couldn't find all the best regeants for the crafted item. If the +60 minute mat is too expensive, maybe I buy the +45 minute one instead. I lose 15 minutes, but maybe I can make two 45 minute ones for the same price as one 60 minute one.
Now imagine a durability system where items break due to durability and leave something leftover that could be used in crafting. Perhaps your favorite sword breaks but leaves a component that allows you to take it to a crafter who can use it to make a similar item.
The crafting and gathering possibilities are really endless in a system where items are constantly being used and consumed. Perhaps there are even "skills" that allow you to destroy an item as it nears the end of it's usefulness to gather a component from it for a future crafted item.
I'm very much reminded of a game called Dungeon Master which had a very unique spell system in which spells are cast by sequencing spell components together. The player could discover spells by finding scrolls that told them the order to sequence the spell or by trial and error. One of the more memorable things was learning what effects the various spell components was intended to provide (oh! that one is Fire and that one is Water!).
In other news... I am writing this from my condo in Hawaii. I've been on vacation for the last week and had pretty limited computer access. The weather has been good and the snorkeling has been great. I don't write about real life crap, but I thought an explanation for the lack of posting was warranted.