I'm experimenting with a couple of different swords. I've noticed that your items level up with you, basically weapons get more powerful as your level goes up. I've been using the Skyforge Steel sword since it was given to me as it is just a reliable piece of steel with no maintenance necessary. I've acquired Dragonbane and have upgraded both of the weapons to the "Flawless" state, and they have the same attack power. Dragonbane has the additional magic buff, but historically I've not been a fan of magical items because that means I have to waste inventory space on soulstones to keep them charged. If I use Dragonbane for a little while and level up, will the Skyforge Steel sword I left in my Breezehome continue to scale up with me even though I'm not using it?

Weapon damage is a factor of your skill, perks, and any equipped items you have which boost weapon damage. There's no "leveling" going on. If you have two weapons that do the same damage now, and they are both the same kind (one-handed/two-handed/bow), then they will always do the same damage even if one is one your hand and the other is in your closet at home.

A special note: Some unique things ARE leveled. If you get a unique artifact at level 20, then it will be worse than the same artifact if you got it at level 50. Personally I consider this a bug because I cannot even imagine any developer thinking this was a good idea. A fix should be available to PC once we have the construction set, a continuation of an identical fix in Oblivion that solved the same problem.

I have always HATED the leveled items issue. In Oblivion, I was too afraid to ever enter an area with an awesome weapon or artifact weapon/armor piece, or do a quest with a leveled reward. I always had to reload old saves, or delete and reinstall my DLC so that the items within the dlc would be at max level. I wish that would change, but it wont. This is the way Oblivion and Skyrim is.

OP is not talking about that.. He thinks weapons have the same XP system as ratchet and clank.

The damn steel sword will get better no matter what one-handed weapon you use because it gets it's power from your one-handed skill, nothing else.

Ok. I just didn't understand how the power of a weapon was determined. Now I do, thanks!

Skyforge steel I've heard has unique property in that it has a damage modifier based on the players level.

And before anyone says it, no this is an independent function totally separate from weapon skill.

Wrong, Skyforge steel works differently to steel.