Cursed Items
As a DM I have been reluctant to use cursed magic items because I wanted to be on the player's side, hurting them didn't feel like a particularly nice thing to do. In my last session I decided to change the theme of the dungeon from serious dungeon crawl to funny trickster lair.
I think that you need to strike a good balance between the positive and negative aspects of the magic item. I went for an opposite reaction with the one I created, read a random item online and copied it and used a plain evil Gary Gygax creation.
First up is the Chameleon Cloak:
Requires Attunement
A shimmering black cloak that seems to blend into shadows.
+2 to all Stealth checks whilst wearing this cloak
[Curse] Once attuned cannot be removed except by a remove curse or wish spell
[Curse] If the player rolls under a 5 the cloak lets off illusory fireworks that illuminates all non-magically hidden creatures.
This was funny as it went off the first time the user tried to stealth and then led the group to question every single item they had picked up in the dungeon. The effect is that a rogue can be hindered at the beginning of combat by not being hidden but it isn't necessarily life threatening. To begin with I would suggest the curses being counter to the desired result.
Second is The Wand of Magic Missiles [and Polymorph]
The wand appears and functions like a Wand of Magic Missiles however once it is activated it also casts Polymorph on the user!
I have made a d100 table to randomise the animal the user is turned into, it's silly fun!
The Third is by the Master of Masters Gary Gygax. It is the most evil thing I have ever seen and it does require you to work hard as a DM. The Stone of Good Luck can be found in the Tomb of Horrors and if you haven't seen it look it up in Tales From the Yawning Portal.
+1 to all skill checks and saving throws
[Curse] Once attuned cannot be removed except by a remove curse or wish spell
[Curse] The player has -1 to all skill checks and saving throws
This item basically nerfs a greedy player, fortunately for me the Bard picked up this particular item. The player was showing off about all of their skill bonuses to the group and I could barely keep a straight face! This does mean that every time that this player rolls a skill or saving throw I have to minus two from it because of the Stone.
A nice balance of silly to evil is best as your players don't want to feel like they are being punished and beaten up. Some challenges are fun and having the subplot of removing a cursed item can keep a party together and moving in the direction you want them to go in. The dungeon and items led to my group having a lot of fun, creating the team dynamics and them having their own little in-jokes.
Post your fun cursed items in the comments below!