I just got The Witcher (yes, I in fact live in 2007) and it's an amazing game. The coolest thing in it is the alchemy system, more specifically secondary substances. If you haven't played the game, here's a brief explanation: recipes for potions need various substances which can be found in ingredients (herbs, monster parts, etc.), but most of these ingredients also have secondary substances in them. If all of your ingredients have the same secondary substance, you get a bonus to your potion (reduced toxicity, damage increase or health regeneration).
I think something similar would be neat in H&H. Not just for alchemy, but for all crafting. It would go well with Jackard's generic recipes suggestion, and would add another layer of strategy to my LP replacement suggestion (crafting stuff to raise skills). It would also be an easy way to make various trees different, or to add multiple types of clay and have differences beyond cosmetic (something Loftar mentioned wanting to do).
I've been thinking about using stuff like brittleness, tensile and compressive strength etc., but none of these descriptors work very well for all the materials in the game. So, a simple colours system would work the best, and would be easiest to integrate into the interface (add a colour dot on the item or change it's mouseover text colour or something). So, you take a red branch and a red stone and make a red stone axe, or you take a red branch and a blue stone and make a plain stone axe.
Now, on to the benefits of colours. The simplest option is to just give a boost to the craft's quality if all the colours are the same. A bit more complex is to make item subtypes if you match the colours (all green stone axe becomes woodsman's axe, all red becomes butcher's axe), and give these subtypes a quality bonus when they're being used for a specific purpose (woodsman's axe gets quality bonus when doing carpentry with it, butcher's axe when you butcher animals). The most complex option would be to do away with using one colour for everything and make hidden recipes for subtypes that call for specific colour combos (red branch and blue stone etc.), and have invalid combos produce the common variety (plain stone axe in our example).
I think this would promote trade, and would be a nice way to make that feeling of discovery last longer. Thoughts?