[Frost]

This is actually a fairly difficult question, dubious magical items used to be a sort of signature of my fantasy games.

I think my favourite was a mask that created an almost perfect disguise but in its inactive state was a greasy paper bag with eye holes cut into it. Now by nearly perfect I mean perfect but for the faint smell of the bag.

The same campaign had a running theme of powerful magic items that looked like complete crap or had embarrassing conditions attached to them. Another favourite from that campaign was the sock puppet of mind control.

Basically you took the sock puppet, said targets true name, acted out what you want them to do with sock puppet and then watched it unfold.