I was reading an article in Dragon #66 discussing the rationale behind banned weapons for Clerics and Magic-Users. This is a topic I've often thought about. The article gets it right in the beginning by stating that these prohibitions are only there for game balance. But then it goes on to discuss possible justifications, such as the metal in a sword disrupting magic.
I disagree. And in my campaign a Magic-User actually did tote a short sword around for a while...and used it to good effect against a sabertooth ogre.
Here's how it works in my game.
A wizard might grab a dead orc's sword and stick it in his belt. Maybe when his spells are tapped out he whips out the blade, feeling more confident than with his dagger. In combat he can either cast a spell OR use the sword. Not both. And if the sword is not already out it takes him 1 full round to get it out. He's not trained after all.
He gets no penalty to hit. Magic-Users already suck at hitting things. The penalty is built in.
He cannot cast any spells and hold the sword. He cannot drop the sword and cast in the same round. He needs his hands free prior to the round in order to have his bag open and his spell goodies at the ready. In my game you need to be able to speak, use your hands, and have access to your wizardly bag of stuff in order to cast. You can't do that if you've got a sword in your hand.
And one last thing. If the wizard uses a prohibited weapon in combat he earns no XP for that combat. You want to pick up that magic broadsword? Go ahead. You can even use it. But it will cost you something.
If a Thief can sneak, climb, and pick pockets in leather armor then a Magic-User should be able to move well enough to cast a spell. However, the restrictiveness of the armor reduces the wizard's ability. In my game there is a spell roll and the armor applies a negative penalty to the roll. Anything heavier than chain mail prohibits casting at all.
For normal games I think this rule would work: The Magic-User has a chance-in-ten of casting a spell in armor equal to the armor's AC rating. Thus leather would be 80% successful casting. Studded leather is 70%, scale is 60%, chain is 50%. And anything better than chain prohibits any casting at all. A shield prohibits casting since it ties up one hand.
So the Magic-User who feels vulnerable walking around with a 9 AC could consider strapping on some Studded leather. He just needs to be aware that 30% of his spells will be ruined because of it.