I think the best way to implement cursed items is to actually make the useful. For example in Baldurs Gate the Wizard at High hedge sold a ring (The hand of...some monster) which increased the users armot class and some resistances, but lowered others. That ring was always one of the first things I bought when I had the money.
The way I see it, a cursed items should have serious drawbacks, but also some really nice bonuses. If you want to use it or not should be a choice, and preferably a pretty hard one. Items that drain your HP every time you hit an opponent in melee is probably not a good idea for a warrior, but a wizard could live with it if it had some nice other effects.
I also like maggothearts idea about "uncursing" items. These items should have SERIOUS drawbacks, but be really powerful when their lust for power/blood is fulfilled.
