Thorstein's Marble

The dwarf took this bit of marble from his purse and with it a steel point. The marble was triangular in shape, white in the centre and one of the sides was red, with a yellow ring around it.
The dwarf said, 'If you prick the white part with the point, a hail-storm will come, so fierce no one will be able to face it. When you want to thaw out the snow, you only have to prick the yellow part and the sun will shine and melt it away. But when you prick the red part, fire and flames and a shower of sparks will come flying out that no one will be able to bear. Besides that, you can hit anything you aim at with the point and the marble, and they'll both come back into your hands when you call for them.'

- Thorstein Mansion-Might, (Anon.,14th century AD)

Well, so I don't really need to expand on this quote at all for it to be clear that this is an awesome magic item. But there are two things to take away from this as general principles of magic item design:

1. There are very specific ways to activate the item's powers, which are tied into the physical properties of the artefact. This instantly makes it much more interesting than just "control weather 1/day, burning hands 1/hour, +5 bonus to hit". It's also more gameable because, for example, the item requires two hands to activate, and requires you not to lose the needle. Now, you can summon the needle or the marble back to your hands, but only if you can speak... thus, there are weaknesses to be protected if you own the item, or exploited if your enemy has it.

AD&D had some things like this, with trigger words to activate magic items, playing music on Heward's Mystical Organ, etc. However, it does open the gateway to DM dickery where the players have to fumble around for ages to work out what a magic item does (or worse, discard it without realising that it's magical). This could be mostly remedied by making sure that Identify spells/sages/skills/whatever are affordable and comprehensive.

2. The marble has a lot of different powers - three separate spells and one combat function. In AD&D terms, it's reaching the border between Magic Item and Artifact. I think it's possibly more flavourful to have a bunch of powers tied up in one item, and it could reduce the dreaded 'Christmas tree effect'. The only problem would be if this made magic items proportionally rarer, so the PCs might spend ages searching for even one worthwhile item, and then whoever gets to use the item will be much more powerful than everyone else.