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If you think it's over the top, it probably is.
If item level restricions are on, there's a 1:1 relation as you said, a level 7 character can only use items for characters of level 7 or less. Since they're not on, a level 1 character could use level 68 items if that's what he wants.
For items within this range you can add whatever you like, provided you keep it realistic. Why should an item grant immunities to death magic and the spell school Evocation (these two practically make you immune to most damaging spells already), or what's your character doing with a cloak that grants him full immunities to piercing and fire damage? Why should your character be immune to critical hits and sneak attacks? Just because you can cram it all onto one item?
The main troublemakers are Immunities (and Resistances), Truesight and Haste. Because they're unrealistic even in a fantasy world, for the most part, and because they give you advantages over certain or all monsters that are decidedly unfair. When you get to the point where all the damage you take is either discarded or regenerated immediately, and you shrug off all spells like a bit of mild rain, you'll know something is wrong.
Just create the character first, and then make the items, if any, around the character. They'll not be as powerful or effective, but they fit the image and hey... wasn't that the point? [img]smile.gif[/img]
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