Stabbey - yeah, I like where you're taking this; in addition to being much better in terms of game balance, this system would make a lot more sense than the current one (e.g. someone who's slightly skilled in Repair should still be able to do a pretty decent job fixing up a mundane dagger - and definitely shouldn't break the thing!)
So I think something close to your second list could work. I also think (small) additional damage/armor bonuses in addition to extra durability points at the higher repair ability levels would be cool, but the devs would need to be careful not to make it too overpowered. Still, anyone willing to dump 15 ability points (or let's say 10, with other Repair-boosting gear) to get to level 5 should be rewarded appropriately, right?
