Being able to actually design you're own armor and weapons from scratch sounds rather unrealistic to expect to me. If we could actually design our own items, it would probably rather be done by having options for the shape of different parts of the item, and also having the option to choose the color and perhaps surface texture of it, if we're lucky, we might get sliders for things like length or size, and you'd be able to choose which materials to use (With stronger materials being harder to work with, of course, since they'd produce stronger items.) and so on, so you'd have some degree of customization, but certainly you won't be modeling new weapons and items completely from scratch, unless you do it outside of the game in a mod. Much more likely, it will be like what most games which have featured item crafting do that I've seen, which is that basically you just have a list of items you can choose from that you can make, if you have the necessary components to do so. What I hope for though is that at least certain more exotic items should require you to learn how to make them, either from something like a schematic, a rare book, or from a master smith. It would just seem too easy if all that was needed to gain the ability to craft items that are supposed to be rare is a high enough skill. I also hope that there is a possibility of being able to smith certain armors or weapons that cannot be found through other means, or, alternately, that a skilled smith might be able to craft higher quality versions of generic items than what you can find in random loot. This would ensure that there's a reason to use smithing even when you can find high level items in loot.
Let me get this straight; we know smithing is IN, but we don't know if it's going to be a player skill or just something extra we can do at the smithy.
I'm pretty sure it's an actual skill, as in the screenshot showing the skill list (As seen http://pcmedia.ign.com/pc/image/article/114/1149185/elder-scrolls-v-skyrim-20110211094549550.jpg) I can see at the far right the word "SMIT" and then the screen cuts it off at what appears to be an "H", the only thing I can imagine it being is smithing. So yes, I'd say smithing is a skill. Most likely, I'd assume, it allows smithing armor and weapons and also is used for repairing them.
Also, I seem to recall Todd Howard mentioning something about wanting to have each specialization have one crafting skill, for stealth, that's alchemy, so for magic, it would naturally be enchanting, and therefore, smithing seems the only logical option for combat.