This is a topic I have touched on once or twice in the past but it must be a year or more since last time. It was also something that Intothatdarkness mentioned in a comment yesterday.
I do not use the Encumbrance rules as written. Initially I just junked them and left it at that. Then when I was reading the players character sheets in preparation for a gaming weekend I realised that a couple of the characters would barely be able to walk and the both the warrior mage and the sorcerer probably could not cast a single spell with the amount of metal they were hauling around.