[Dovie'andi]

I'm not going to suggest anything new or revolutionary, I just wanted to add my two cents. Mainly, what I'm worried about is the possibility of too much freedom and customization. Yes, too much. I'd hate to have just flown across a beautiful valley, watching a dramatic sunset, only to fly by some moron wearing neon pink glowing armor with the words 'i PWN n0bs' written on it in flowing golden script. Kills the sense of immersion. Yes, crafting definitely needs some customization, but I just want to warn against letting players make things that 'don't fit.'
First, naming is just too dangerous. How would you feel if you spent two days questing for the right ore to make the sword you've wanted since day 1, only to end up with the Sword of lolISuCK?
Second, I completely and totally support the ability to add dyes, glows, etc. but make sure the colors are reasonable. If it were possible, I would suggest to tailor color choices to the specific items, i.e. only ribbons and cute hats could be dyed pink, but your suit of chain mail couldn't. The Demon's Fang can't glow an angelic gold, but the Hammer of the Gods can. Some way to keep the customization reasonable with the items.
Thirdly, I also love the idea of swappable textures palettes. Odds are this would just go too far, but it really goes a long way towards making you feel like it's a real world. Maybe restrict it to item power/value/rarity. We don't need 10 different pairs of leather breeches that nobody's going to wear after level 1, but if the spiffy new Spiked Full Plate available at level 40 had a few variations, that makes everything all the sweeter.

Personally, immersion has to come before customization, and that goes both ways. Players shouldn't be allowed to make things that kill your immersion, and likewise every single lvl 37 Warrior shouldn't look identical. It all contributes to the overall experience.