Necropraxis has a great house rule to get at this. Go here and follow all his links to read the cool conversation about weapon wear. While having a system of wear allows weapons to become part of the resource management of adventure gaming, I'm most interested in how this could make weapons more tangible. So, I would probably simplify the wear aspect even a bit more. Here's my go at it:
All weapons have a quality from 1-20. If you roll under the quality of your weapon when you attack you "notch" it. Notched weapons are -1. If a weapon is notched again, it breaks. You can hone out a notch in camp.So, you basically have two pieces of bookkeeping (quality # and notched or not) and one thing to keep in mind as you play (did I roll under?). I think that would be worth it.
To keep things simple I would consider a weapon that has had a notch honed out of the same quality as a brand new weapon. In other words, I don't want to have to track how many times a weapon has been notched. I would probably allow a blacksmith to fix a broken weapon at half original cost, but wouldn't reduce the quality because it was repaired. I would probably not have criticals affect notching, otherwise, if a critical miss is always a notch than a #1 and #2 weapon are identical. The same if a critical hit never notches, a #20 and #19 would be identical.
Cool Side Effects
One thing I've been trying to do in my game is make the campsite a tangible place too. For example, music and freshly cooked food each give +1 to hit point recovery rate. Having weapon honing be important, would give players another thing to do in camp and another reason besides recharging the magic user to want to stop and camp.
This rule would also make carrying weapon spares an interesting proposition, making encumbrance matter for more than just how much gold you can carry out of a dungeon. And weapons found in a dungeon could become important if you don't want to risk breaking your already notched, but high quality sword.
Why No Armor?
You'll notice I've left out armor. Armor presents a different challenge for me. First, notching would depend on monster attack rolls so, I would have to worry not just about player AC but player armor quality as well and I've got enough to worry about in the heat of combat. Second, if armor is found in the dungeon, it's not like your going to stop, strip off your old armor and put on the new the way you might immediately start using an axe you find in a crypt. I think maybe a piecemeal armor system might be a possible solution, but armor is less a concern for me right now.
I'm excited to try this in play.