Rope of climbing of strangulation
The first time you try to use this rope after it levels up, it will leap for your throat and try to strangle you. (It has your HP and defenses, and makes a Grab attack vs. Reflex, using the attack bonus of your best at-will attack. At the beginning of each turn that you are Grabbed, you take damage equal to your surge value. If you avoid or escape the grab, or if the rope is Bloodied, it will coil submissively and, from then on, obey your commands.
While some items may get mechanically better (for instance, a +1 sword becomes a +2 sword), it's more challenging to improve items that don't have numeric bonuses. I thought I'd go through the Wondrous Items in the 4e Player's Handbook and give examples of how each could gain powers that reflect their history.
Once you command the rope, you can order it to strangle people (using your AC, HP, attack bonus, and doing damage equal to your surge value). Under your command, it can only attack people against whom it has combat advantage.
You can repair all HP damage to the rope during an extended rest.
This ancient rope dates from the First Age, a time when the makers of magic items were malicious pranksters and every magical trinket had the potential to be an inescapable deathtrap. Thankfully, few ropes of strangulation have survived to the modern age.
Cam the Cat's rope of climbing
This rope can lengthen or retract at your will. As a minor action, you can cause it to lengthen or retract at up to 6 squares per turn. This can raise or lower someone holding the end of the rope. It may get as short as 1 foot long or as long as 1 mile. It may also be told to extend or retract to a certain length, either instantly or at any time up to one day in the future. (Example: "Rope! Extend 100 feet so we can climb down the tower, then retract after we all climb down. After one hour, extend 100 feet again so we can climb back up.")
This rope of climbing was used for years by famous burgler Cam the Cat. It was finally used as Cam's noose: it was told to retract after an hour so he'd have plenty of time to think about his crimes before it strangled him.
Cunning Rope of Climbing
Besides acting as a rope of climbing, this rope can follow complex orders as if it had an Intelligence of 10. It can travel unattended, wriggling like a snake at a movement rate of 5; pick up and hold items, using either of its ends as a hand; and act independently, using basic problem-solving skills. It has blindsense 3, and the HP and defenses of its owner. It can communicate by twisting itself into cursive script.
This is a pretty useful item, guys. If it had a basic attack, like the Rope of Climbing of Strangulation does, I'd be willing to play it as a PC.