I think that the items system in Demigod at the moment is a bit of a mess.  There are lots of them spread around different shops and they each do too many different things.  Figuring out which ones would be useful at what point is tricky and time consuming and out of whack with the game's pace.  On top of all this, they have serious flavour issues: the Rook already has a hat, and it throws rocks, what use would he have for a helmet?

So, idea number one, no more going down the shops.  I've heard that the shops are already going to be merged, but I would suggest getting rid of them entirely.  They're a nuiscance to click on, dodgy with the path-finding, and Demigods visiting a shop full of glowing artifacts is a bit jarring when compared again the beautiful maps and characters.  Instead, a tab like the skills tab.  Preferably accessible during death to give something to do and to take a bit of the time pressure out of shopping.  Time pressure is bad here because shopping is not an interesting challenge, but rather a matter of finding where you're supposed to click.  Players should still have to retreat to designated areas (healing crystal?) to shop whilst alive.  If we really must have shop buildings, could they at least fit the setting?

Idea number two: fewer items, and fewer powers on each (but probably more significant).  Picking items would be a much more interesting decision if each had a clear purpose.  This could realised by keeping them to only one or two abilities and perhaps adding a bit of flavour text. The rest of the flavour text in the game is gorgeously written, so I want more.  I am in favour of an upgrade path of some sort, to allow for some fine-tuning as the game goes on.  Perhaps the second power could be reserved for upgrades?

Idea number three: a different scheme to the boots/helmet/breastplate/gloves/rings thing.  The current setup is more appropriate for games with human characters, and really has no benefit if our Demigods aren't actually going to wear the items visually.  People have suggested colour-coded runes, which I think could work. Alternatively, many games with inventories have miscellaneous non-wearable items which are still usable or give a passive boost.  So long as there is a clear connection between the item graphic and its powers, I suppose it could be anything. Overly cheesy example: skull gives life drain power.

The overall point is that items at the moment feel like they've been ripped straight out of Warcraft 3, which didn't have a particularly good system in the first place.  In other areas Demigod is a very clean game, with relatively simple choices leading to an interesting variety of tactics.  It also has a very cool art direction with a real sense of grandeur.  Shopping for items as it stands is, by contrast, fiddly and ugly and small.

(Apologies to everyone whose ideas I've nicked bits of.)