After an exhaustive, mind numbing journey through the land of Powdered Doughnut Residue known as the Paizo Rules Forums, beset on all sides by nerds of different flavors, led occasionally by wizened hermits posting links to past posts by Sean K Reynolds, Pathfinder developer, I now believe I fully understand the ugly morass that is the Pathfinder Magic Item Crafting System. The rules as written are confusing, contradictory, and largely just messed up, and according to Sean that's at least in part because drafts got published instead of more refined products, the wrong Word documents made their way into published material, and Kali knows what else.
To make matters worse, the ugliness of the current body of work on item crafting has driven the Paizo developers to cease communication with the playerbase via their forums answering these questions, because to do so would be exhaustively time consuming due to the bugs in it, which leaves a deafening lack of resolution in any discussions about item crafting.
What I've discovered, is that the way I and everyone I've ever known, as well as probably half the people in the world at least, were not playing according to the rules as Monte Cook envisioned them, and that's largely because the rules as he envisioned them weren't very well thought out on a couple of points. The developers of 3.0 never wanted to have a item's caster level be a prerequisite at all, except for a few rare exceptions, they wanted the thing tied to spell casting prerequisites. Pathfinder shifted this emphasis to spellcraft rolls. Where Pathfinder jumps the shark, is it only considers actually being able to cast the spell requirement worth about 5 points on that roll, instead of it being a de facto requirement like it was in 3.5. The upshot is in Pathfinder, any properly built 8th level Bard, (or whoever) can create items that replicate 9th level (CL20) spell effects, even if his spell list never sniffs those effects, and without ever even needing to make a roll at all and risk creating a cursed item. And with the addition of new feats in the APG, this spills into Fighter or Barbarian just as easily. A third level character fresh off the Newbie Boat could craft a crystal ball without ever making a roll, the only thing holding him back is material costs.
Now apparently quite a few people play that way, including the developers of the game, which I suppose explains campaign worlds like Ebberon which are so magic twinked that they border on nonsense. But I've never played that way and nobody I've ever played with has played that way, so I offer a clear, direct, reinterpretation of the crafting rules here, that serves as an optional house rule for use in Panakos campaigns. The house rule only differs with the core rules on two fine points, but I'll lay the entire House Rule out in detail first, because it's what I recommend to bring Pathfinder back in closer step with how we always played 3.5.
First, lets talk about prerequisites. There are two flavors of prerequisite, ones that may be bypassed by taking +5 on the spellcraft check to create the item, and ones that can't. The ones that can't are the relevant creation feat, and the minimum Item Caster Level, hereafter "ICL." In theory, the "CL" entry on the item list in the rules would equate to this minimum ICL, but some of the entries in the book are wrong, and apparently according to Scott these were to be removed during one of the publishings and got left in by accident. So the first thing to realize is that this minimum ICL in the book might be right, but isn't necessarily so, and players should check before relying on the published number. The way you check, is to compare versus the minimum level to take the feat, three times the bonus for magic weapons and armor, and the minimum level to cast the requisite spells, if any. This sets the minimum ICL.
A crafter may craft an item at any ICL between the minimum, and his own caster level, hereafter the "Creator Caster Level," or CCL. For many items this has little benefit other than making the item harder to dispel, but for others you get benefits, such as extra d6 for a fireball wand. For items that receive benefits from a higher CL, increased crafting cost will be taken into account in the description of the item, or in the crafting explanation in the rules. For many items, crafting them at a higher ICL than the minimum is free, and there's no reason a PC shouldn't go ahead and do it.
The second set of prerequisites are the ones listed in the "prerequisite" line other than those listed above, which may be bypassed by taking +5 (for each bypassed) on the spellcraft roll to craft the item. These are things like the spell itself, being an elf, being three times the bonus given for amulets and cloaks, being of the appropriate caster level for the Pearl of Power, etcetera. The spell prerequisite can't be bypassed on Spell Completion or Spell Trigger activated items, such as wands, staves, and scrolls.
The important thing to remember here, is that you can't bypass the minimum ICL, and bypassing other requirements like the specific spells, doesn't lower the minimum ICL. I personally don't like that Paizo allows crafters to "Take 10" on their roll, but for the sake of staying somewhat consistent I recommend you still allow this.
The "100% first, 75% second, 50% other powers" rule for unslotted items was intended to apply to staves and other items that all come off the same charge pool or "per day use" pool. If you wanted to craft a metamagic rod that had separate powers in it, each of which could be activated 3 times per day, you'd be on the hook for the "150%" cost multiplier for slotted items, since you've got 2 different pools you're drawing from in the same "rod slot."
In further research, I've discovered a bunch of other bugs, not only in the core Pathfinder rules, but the Advanced Player's Guide as well. Many of the prices for staves in the APG, for instance, are half the cost they should be when you try to replicate them using the staff creation rules. This appears just to be sloppy writing with no proof checking - they used the crafting equation to determine the "cost to craft" for the core rules staves, and called it the "market value" for many of the APG staves, making them half the price they should be. This error isn't universal in the APG though, so you need to check each staff by hand before using its crafting value in your game.
There's one major difference and one minor difference between what I've laid out above and how the rules were intended by the developers. The minor difference is the developers let a crafter set the ICL at whatever level they like, from 1 to 20, as long as it's a minimum of the level needed to craft the spells in the requirement. So a 10th level crafter, properly statted, can make ICL 20 items. Not only that, for most items, the 10th level character will always craft them at CL20 because there's no drawback to it. That nerfs Transmute Metal to Wood and partially nerfs Dispel Magic, but it's not a huge flaw. The major difference, is that according to Paizo, ICL isn't a requirement at all, so a properly statted 8th level character can crank Candles of Invocation out with which to summon Gods using Gate, a 3rd level character properly statted can craft crystal balls, etc. It basically removes any sort of barrier between low to mid level parties and extremely powerful effects that routinely break the scope of the sorts of encounters they're likely to face at their challenge rating. ICL is only used to set the DC of the craft check, then noted later for dispel attempts.
Because I do not recommend introducing a world where any 8th level antagonist with financial means can have access to Gate, among other resultant silliness, I recommend using the house rule.