Items created using the sigil hue bug (known as purple
items) are considered illegal to buy, sell, trade, or own
by OSI. If you are in posession of any of these items dispose
of them in any house or town trash bin. OSI may possibly
take action against your account if you are discovered
with these items.
Although at first there was some questions as
to whether these items were legal, there is no question
now. Back when the bug first appeared the GMs didn't know
what to say. Some said they were legal, some said don't
buy or sell, and some would even ban you. It was a very
confusing time.
Update April 25, 2003: With the introduction of neon
weapons some look like purple sigil items (energy based
type). There is no official comment from OSI but I assume
old purple items are still not accepted to own, even if
they have a corresponding neon type.