I'm wondering if I missed something in my read-throughs of the rules or if the mechanics aren't there. Are there actual mechanics for magical items, like magic swords & potions & magic rings & the Philosopher's Stone & what not?

Though there aren't any examples of or mechanics for making magical items in BW, I have found inventing my own to be fairly straightforward.

Items can add dice to an appropriate skill and/or add temporary traits to the user. For example, the Crown of Command (sorry GW!) would grant the wearer the Commanding Aura trait plus add 3 dice to Command tests. The simplest of magic swords would have an increased VA, Speed, or Power, or possibly grant +1 die to the Sword skill. There's a magic spear in our campaign that grants +3 dice to the Spear skill and if, on those 3 dice, all 5+'s come up, the target explodes - no matter what his MW! There's also a magic stone that grants the bearer the Gifted Trait, plus it acts as a 3 dice shunt and multiplier!

When creating magic items for your own players to use, bear in mind that the scale of BW is quite small. So any item giving them an extra 3 dice is a MAJOR artifact, as would be an item that Greyed out a skill. However, a amulet that bestowed the Charming trait on a character is fairly low-powered.

I understand that Luke is currently trying to figure out exact mechanics for creating items in-game. Ideas bandied about include ingredients that would grant their traits to the items, such as needing the eyes of an orc in order to create an amulet that would allow the user to see in perfect darkness. Also, investing artha into items by the user would bestow his traits to that item over time. For instance, the Berserker Trait might rub off a warrior and "stick" to his favorite sword if much investiture artha was spent.

what Pete said.

and that goes double for the "+1 means a whole heck of a lot in Burning Wheel." Be careful about dumping in powerful artifacts without thinking of their effects. I've made a few good mistakes in my time.

-Luke