I also reconmend these mods by z999z3:
http://planetelderscrolls.gamespy.com/View.php?view=Mods.Detail&id=6280
http://planetelderscrolls.gamespy.com/View.php?view=Mods.Detail&id=6289
http://planetelderscrolls.gamespy.com/View.php?view=Mods.Detail&id=6299
http://planetelderscrolls.gamespy.com/View.php?view=Mods.Detail&id=6323
I also made an darkbrotherhood version:
http://planetelderscrolls.gamespy.com/View.php?view=Mods.Detail&id=6838 + http://planetelderscrolls.gamespy.com/View.php?view=Mods.Detail&id=8797
and I am working on a chitin weapon one too
Each one provides an NPC that can upgrade that specific weapon/armor type, increasing the value, enchanment, health and damage (if a weapon) by 25%