Is it possible to hide the negative effects items have? It would add another layer of paranoia if you didnt know for sure if certain item had drawbacks or not.

I second that. It would also add when a priest/wizard decided to bestow curse... Actually, I think every property should be hidden unless you have a good mount of lore, BUT, I guess its a code problem to do such.

You have to trust people to be good roleplayers about it, and if you give them cursed armour trust you if they would normally trust you.

Possibly having the effects revealed only after you've used it/worn the item for a certain amount of time?

I think they should see the effects, If you just gave them a cursed sword, they will feel it after fighting, but never would see the effects on their Character Sheet. (like, suddenly you can carry less, when you roll (on the log of battle, down) you get minuses etc.)

Why only the negative effects? Yes, I agree that you shouldn't be able to tell all the properties of an item merely by looking at it, but it should affect both positive and negative effects. Unfortunatelly, I think this is hardcoded into the NwN engine.

I'd like to see that you would be able to use an unidentidied item and still get the negative/positive effects effects. You would be able to roll a Lore check once a day, and the higher the roll, the more would be revealed.

Sadly, this isn't possible either.

We already have scripts for cursed items, which are essentially exactly what you are suggesting.

It's not possible to hide all properties on all items.