While my players might prefer a 2 sword of awesome-slaying, I've taken to giving them items that may be very useful, but whose use is not immediately apparent. I like these kinds of items because they force players to think outside the box, and they're not just using something generic with a boring mechanical bonus. Here are a couple of examples:

The Immobile Rod

The Immobile Rod is a scepter, about 3 feet long and maybe an inch and a half in diameter. When a command word is spoken it becomes locked in place, whether suspended in the air, or laying on a table. If the same word is spoken then the rod again obeys the normal rules of physics. So far the party has not been able to put enough force on the rod to budge it while in a locked state. They've used it to bar doors, and as a climbing assist so far...

Calambar's Music Box

Created by an elf who wanted to experience the human sensation of sleep, this elegant wooden box has a metal drum with pins and comb attached to a motor inside of it. When opened, an elven dancer begins to spin, and a lullaby plays as the drum spins, pulling the comb across the pin. This causes most people within audio range to fall asleep, especially those who are unaware of the music box's power.

So here's my question for you: What multi-purpose items have you introduced into your game where the application of the item is uncertain (magical/technological/whatever)?