Since the Holy Avenger is probably the most sought after weapon for Paladins (and only for Paladins), I think I found a nice twist on the weapon that might work in the game.
With addition of Artificer, the Artificer has a pet that can level up with him. As the Artificer levels up, he can "customize" his pet with Homunculus Enhancements. What if the general system that levels the Artificer were transferred to the Holy Avenger for the Paladin?
As a Paladin levels up, he can customize his Holy Avenger with Holy Avenger Enhancements. Just like the Artificer, the APs will be separate from the Paladin's personal APs. Some enhancements could be extra damage: Holy, True Law, Undead Bane, Evil Outsider Bane, Lawful Outsider Bane. Maybe at higher levels Banishing and Disruption can be added to the Holy Avenger.
So where does the Holy Avenger come from? Why not just keep it with the Holy Sword spell where the Paladin must summon it? Everything else about the Holy Sword will stay the same. The Holy Sword can still be given to others, but the Holy Avenger properties drop from the weapon, unless it's another Paladin and it will only contain the Holy Avenger properties of the Paladin who weilds it.
Now there might be a problem with the Paladin not gaining the spell until level 14, so maybe the "training" of the Holy Avenger doesn't happen until level 14.
Well, I'm just tossing this idea out there. Not sure if anyone will like it or not.
Edit: I forgot to add about problem with the lack of weapons that one can select with the Holy Sword spell. I figured with the Enhancements for the Holy Avenger, APs could be spent to make the weapon of their choice. For example, since there is no Falchion components, there will be an Enhancement that will turn the Great Sword component into a Falchion.
Edit 2: It also occurred to me that if my suggestion were to be implemented, the Holy Avenger effect on the Holy Sword should also only affect the main-hand. That way if TWF Paladins were to use two Holy Sword, only the main hand would be granted the Holy Avenger status, while the off-hand would just be a regular Holy Sword.
Edit 3: Corrected text about the Holy Spell being level 4, so Paladins don't get it until level 14. Grrr, typos.