I just read an article by a DM talking about magic shops. He though that they should exist in bigger cities and magical items should cost a lot more than they do in today's computer games. He thought they should be even more than in the 1e rules.
I don't know if y'all are familiar with the old AD&D news group, but it's still alive and well as a google group.
A lot of the talk it about 3e+ but there are still a lot of people playing the earlier editions. And, the archive is searchable.
http://groups.google.com/group/rec.g...pics?hl=en&lnk