Crafting is, as the name implies, the ability to create an item, be it magical, non-magical, or somewhere on the spectrum in between. It is used by all characters in the game who wish to create an item of some form or another, and is generally a class skill for every class.
Creating an Item: Making items takes 1 hour for every 500gp of market price. If a crafter fails the Craft check by 5 or more, he ruins half the raw materials and has to pay half the original raw material cost again. Due to the complications involved, a crafter may never take 10 or 20. The market price of all magical items is increased by 50% over what is listed in the SRD/elsewhere.
Mundane Items: The craft check for mundane items is DC 15 for normal mundane items, and DC 20 for masterwork or otherwise complex or superior items. The maximum value of a mundane item that a crafter may create is equal to 200gp * the number of skill points invested into Craft. If the maximum value he may create given under Magical Items is higher, use that instead.
Magical Items: The craft check for magical items is DC 20, +10 for every point of total enhancement bonus. For weapons, armour, and shields, treat enhancements that do not have an enhancement bonus listed as if they required an enhancement bonus equal to the closest enhancement bonus in cost. For items that would not normally have an enhancement bonus, such as wondrous items, compare the cost to the enhancement bonus table and treat them as if they were the enhancement bonus closest to their total cost (using the armour table [increased by 50%, as above], and rounding up if necessary). Crafters can create magical items with an enhancement bonus up to the total given on the chart below.
Level Skill Enhancement
5 8 +1
10 13 +2
15 18 +3
20 23 +4
Synergy: If you have 5 ranks in Craft, you get a +2 bonus on Appraise checks.
Untrained: This skill can be used untrained. It cannot make magical items untrained.