Cursed Item Design

A good basic principle of cursed items is this: take a standard item, and make it do what it's supposed to do except not quite right, or make it do something ironic in addition to the intended effect. Go for things that work just fine, if you're okay with the side-effects.

Examples, just looking through the Magic Item Compendium and coming up with things off the top of my head:

• A bear helm that also transmits werebearism
• A belt of growth that makes you grow, but none of your items grow with you. Any armor and clothes worn (except the belt) are destroyed, and your weapon still does its original damage
• A blindhelm that also makes you permanently blind
• Bracers of opportunity that provoke an attack of opportunity every time you use them
• A cloak of the salamander that has a 50% chance of setting its wearer on fire (doing the listed fire damage every round until the wearer is dead or immersed in water) every time they activate it
• A hair shirt of suffering that damages the wearer (by the same amount healed) every time they use its healing ability
• A ring of negative protection that, instead of protecting you from negative energy, instead grants negative protection (i.e., vulnerability) to all forms of energy
• A shirt of the leech that also attracts 1d4 leech swarms (Stormwrack, I think) every time the wearer enters water
• A torc of heroic sacrifice that has a 25% chance of outright killing its wearer every time it's used
• A metamagic rod that applies a misspelling effect to spells instead of a normal metamagic effect

Also consider cursed coins - nobody ever thinks to detect magic the money!