Quest items do not count towards the inventory limit (or didn't in D2:ED, anyway).
In a world with levitation strong enough to keep huge rocks floating in the sky, I don't have a problem with levitation strong enough to control a fall. Also, the slayers were formed to exclusively go after opponents that can fly, so the ability to take a fall would have needed to been one of their first concerns.
I played a strength based warrior, and noticed quite a bit of balanced or magic based weapons, etc. It can seem like a curse, but even with a perfectly random distribution there is just more equipment that does not match a particular build than does.
I didn't mind the blur effect when flying too much in D2:ED, but would have preferred to been able to turn it off. In the cutscene meeting Partiarch, the video is blurred (at least in the Xbox version), but clears up for a second (which looks much, much better) and then goes back to blurred.
