DISPELLING THE RUMORS
Cheating
Question: Will it be possible for Blizzard to eliminate cheating?
Answer: No
Blizzard can make as many patches as they wish, but some smart-ass hacker will rip apart Blizzard's code protection in under a week. This has been demonstrated already. Even if Blizzard stores character information on their servers (which is NEVER going to happen), people will still be able to run executable cheats and edit their character information in memory.
For those who don't know, here are the know executable cheats:
TownKill: This is the nastiest of all cheats available. It lets people attack others in town when this is not supposed to be allowed. Some say they have TownKill to defend themselves against other TownKillers. They are just cheating also(see my opinion on TownKilling).
Hit Point and Mana Cheat: This executable cheat allows the user to exponentially alter their hitpoints and mana points. If you see someone with hit points over one thousand, their is a good chance they are cheating with this executable.
AutoKill: This cheat (to my knowledge) allows people to just tap a key or hit someone once and they die...no matter what. It only works in dungeons.
MonsterKill: When a monster kills a player, the player loses his/her gear. If a player kills another player and they are not both Player Hostile (swords crossed icon) then the dead player just loses their gold. MonsterKill allows people to kill others and make them lose their gear no matter what hostility setting they have on.
Is there such thing as the CowKill Cheat? Nope. It's just a joke. There are cowkill.exe's but they don't do anything.
Hacked Items
There has been a lot of talk on battle.net about hacked items. Hacked items are items that are which they shouldn't be. For example, there are Thinking Cap rings, Gnarled Root rings, and more. These are items for people who cheat. Yes, it is cheating to alter the game in a way in which it was not supposed to be. This is not Quake, people. Diablo is NOT a customizable game.
Hacked items are real, yes. There are limitations to hacked items though. To make it very clear:
YOU CANNOT ALTER AN ITEMS NAME!
Therefore, there is no such thing as Diablo's Plate, Ring, Sword or the Azurewrath and Universe Ring. The only thing that can be hacked (to my knowledge) is the class of an item and the statistics it has. You can change a weapon into a ring or you can add charges to a staff. You cannot, however, make a permanent weapon that does 99999999999 damage and adds 99999999 to your hit. You can only do that temporarily.
So, if you are using a hacked item, you are directly or indirectly cheating. It depends if you know if it is a hack or not.