So, we are currently thinking about changing the smithing skill, especially how one gets it. What I like about the smithing skill: It gives clans the ability to produce their preferred items cheaper, as well as their heirlooms.
Anyway, I'm not going into detail what our ideas are or how it works currently, but instead:
What is, in your opinion, a gameplay enhancing way to distribute smithing skills?
Remember what chadz is asking us. He's looking for a way to distribute smithing skills. Although some of the ideas I've seen here are very interesting, I think they are getting away from the point of this thread and perhaps too complicated. The more complicated it is, the harder it will be to program and balance.
Using single player Mount and Blade as a guide, I think it can be done in a very simple way. Just give everyone exclusive smithing skill points each time they level up. They cannot be converted to attributes or skills and you cannot get more of them by sacrificing other stats. The ability to respec these points for a fee but independent of the rest of your character would be nice as well.
I believe there are a little over 700 items currently in game and our characters have 9 fields(places to put gear, not "slots") in which to equip items so perhaps having somewhere between 30 and 90 smithing skill points at level 30 would be a good place to start. You could then choose which items to put points into and the points would work in the same way they do now for the sake of simplicity.
That being said, I like some of the other ideas I've heard here like the ones that encourage factions to have a consistent look in their gear and perhaps be known for what weapons they bring to a battle and therefore add a bit more strategy when deciding how to counter them. I love the idea of, for example, one faction being known for their uniform of surcoat over mail with mail coifs and mostly wiedling red tassel spears, arming swords and crossbows. That is how historical armies outfitted themselves after all and the factions from single player Mount and Blade as well.