EQ2 has the best character generation system of any MMO by far. The diversity of characters and armor is un-surpassed.... but how many times have you gotten a seemingly awesome armor upgrade only to find that it makes your character look like a fool?
With the implementation of appearance slots, you can now cover ugly armor upgrades. Why not go a step further by allowing one to preview items appearance on your model as done in WOW?
The indroduction of armor dye would add a dramatic amount of divesity to the game. It could be worked into the game economy as done in EQ1.
Finally, give the option to hide any given piece of armor entirely. To benefit the economy, they could create invisible dye or make a spell/item that turns any given piece of armor invisible.