Another of the (now discarded) innovations of 3rd Edition D&D is XP as a commodity. In 1st and 2nd Edition it was possible to lose XP to creatures like the undead or items like the Book of Vile Darkness. It wasn't until 3rd edition that you gained the ability to spend it.
While not always common, the ability to spend all that XP that was "burning a hole in your pocket" was very present. Magic Item Creation was probably the most popular way to spend XP. It was followed closely by spell-casting, where several high end powers required the expenditure of XP. Psionic Powers were another common place to spend XP, especially since XP Cost replaced the use of expensive material components.
When I first started 3rd Edition D&D XP costs seemed an inspired solution to me. The new item creation rules had opened up the ability to create magic items to much lower level characters than the past. Unfortunately, unchecked this system would be ripe for abuse. After all, a 1st level party could decide to sit tight in a town for a month and potentially make thirty scrolls per spell-caster! Putting a gold piece cost limited this abuse somewhat, but an XP cost hit the player where it hurt. While the XP cost for utility items was never very high, it did cause most players with item creation feats to sit up and say "Hey, wait a minute!" when other players would suggest turning their characters into scroll and potion creating factories.
Similarly, XP costs served as a good deterrent for the use of spells like Wish or Miracle. Those "do anything" spells were nice to have in your back pocket if you were a spell-caster. Unfortunately, without any deterrence from using them, there would be no rational reason not to make a wish every night before bed (giving "when you wish upon a star" new meaning). The XP cost handled this nicely.
Now, you may have noticed one of the problems with XP as a commodity. Namely, only the spell-casting classes spend XP. As a result, it tends to act more as a punishment for playing a spell-caster than a check for using these abilities. After all, lets say you have several crafting feats. You might make magic armor and weapons for all of the party members. Craft everyone bags of holding and a couple of ability score increasing items. The end result is you are lagging behind everyone on XP while they are more powerful due to their new magic items. Now that hardly seems fair, does it?
I can't say I will be sad to see XP cost go. In D&D 4th Edition nothing takes away XP. Not undead, not dying, and especially not casting spells or prayers. This is probably for the best.
Next up, the new multiclass rules!