In various forums I've read about the availability of masterwork items. I seen them at various vendors and even went on a quest to be able to get them from the smith in Hommlet expecting some really awesome items. From what I've seen there is no difference between regular and masterwork items. They have the same damage and range, same defense etc. Are these just a way to rid the party of excess gold or what? TIA
From what I've seen masterwork items have an extra +1 THACO(to hit roll), like magical +1 weapons, but aren't, technically, magical weapons as such.
Masterwork items have a variety of benefits ... but the Biggy, is you can enchant them with the appropriate feats and such. I advise checking the SRD (system reference documents), off the Wizards of the Coast website - one of the folks who've been around a while has a link to it on this forum, answering someone else's question. I'll see if I can find it, and edit it in.
That's the most important benefit. Providing you have the spare XP, the gold and the right feats and spells, you can make almost anything. Customised weapons are mighty useful.