It's always been my personal thought that magic swords should be rare, powerful and perhaps a bit dangerous for everyone. One of my personally favorite ways to do this (although I haven't done in a very, very long time) was to state that a magical sword had to have an enpowering spirit, a demon, an angel, a elemental or even an overly powerful mortal soul. These spirits would be sapient and in various stages of wakfulness (the more awake, the more powerful, the more powerful the more dangerous) and might not always agree with their weilders agenda...Warlord wrote: "I wasn't about to leave Hellfire down there….Magic swords are harder to come by than honest politicians."
For an example one of my favorites was, what else but a blade of icy magics that turned the very blood into a frozen mush. Powered by an Immoth, who volunteered ironically enough for his own reasons, it is so old the powering spirit as even forgotten his own name...
Another favorite was a fire based sword that held the imprisoned soul of a fire mage, he above all else wanted out! His goal was to convince the wielder of the sword to destory it and release his soul and if he couldn't do that he would plot to get himself a new wielder to start over on.
Lastly a sword I used to taunt and terrorify my players, yes, a demon sword. While bring great power, it would attack it's weilders mind, seeking to turn him into a champion of darkness and a traitor to his own. The demon in question (I changed to type of demon to whatever seemed best to me at the time) enjoied it's time in the sword, after all in the sword it could cause untold desturction and ruin and could not be bnished to hell.
I did hint at the existence of an angelic sword as the counter of the demon blade, but I'm sorry to say that the players never even got close enough to it for me to put that much work into it's background or stats. I would toss out rumors that often clashed completely and caused much confusion and every now and then give them a taste of hope but the campaign ended before they got anywhere. Such is life.
Moving on, I'm wondering what my fellow posters take on magic swords is. I'm also open to suggestions as to new swords on the above formula if that takes your fancy...