Second, since we can probably expect a lockpicking minigame, it might as well be a good one. I found a video of a very interesting puzzle game by an indie dev, where you have to get a ball through mechanisms you can only see indirectly: http://www.youtube.com/watch?v=5N91lVqCSNc
An adaptation of this to lockpicking would have great potential. They should ask for submissions from this guy to see if he can design a good lockpicking minigame based on the same concept.
Edited to add my slightly modified second post:
I like having a skill-based element too, it's a CRPG after all, otherwise you lose all the character-building aspect. I'm not sure about the issue of limiting certain locks by level, because to balance the game you can't give the player lvl 20 loot at lvl 1, and some players become so good at minigames that it stops giving any challenge (then they find the lockpick skill useless).
Proposed solution: Taking as a reference the video above, design progressively more intricate mechanisms for locks. I don't think it should try to mimic too much real locks, having to get a lockpick-shape object through instead of the ball seen in the video would be fine. Just assume all locks are a bit magical... Not all locks of the same difficulty need to be the same, either. Actually they should be randomized somewhat, otherwise players will just learn the different models by heart.
At lvl 1 the player can't see the inside mechanisms at all, but an easy lock should be simple enough that you can open it just by playing around in it. Hard/Very Hard Mechanisms, on the other hand, should be so intricate that a lvl 1 player has no hope of opening them because they lack too much info. On top of that, they could include magical trap triggers or lockpick breakers that you must avoid with your lockpick, something impossible to do blind.
Then as lockpicking skill perks, give the player progressively better means of probing the inside of the lock, a bit like the flying robot in the video I linked. A grandmaster thief (100 lockpicking) could maybe even see clearly the whole mechanism, but would still face the challenge of time as complicated locks take time to work.
As far as magical lockpicking goes, I always found the Oblivion system lame in comparison to the minigame. Just cast the spell, and bam, it's open. What would be interesting would be a different version of the minigame: have the player work the lock, but make him use different, magical tools. So maybe instead of using a lockpick, you could fly a little ball of energy inside the lock, and interact with the mechanisms that way. Also the ways of seeing the lock's insides would change.
Finally I'm favorable to lock bashing, but I've never seen it done well up to now, in any mod or game. Given enough time and proper tools (sledgehammer, crowbar), you should presumably be able to force open most locks. However the noise should attract people and enemies like hell. Major inconvenient: hitting a container like mad has a good chance of breaking fragile content. There's also the problem of leaving evidence: seeing a forced container or door should be instant theft alarm, while a clean lockpicked chest won't be noticed unless someone is looking for the stolen contents. And for game balance's sake and since we're after all living in a magic world, important containers or doors should have magic traps, alarms and reinforcements that make bashing them down pretty impossible (though superhuman strenght might beat a low level of magical reinforcement).
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Other lockpicking system videos people have posted:
Two Worlds: http://www.youtube.com/watch?v=22jpO7eQRS0&feature=related
Mafia II: http://www.youtube.com/watch?v=oS96dT8LZS4