Basically they turned the game into a loot based game so crafters have a much lesser role in the game than they did. The mechanics work pretty much the same as they do now but in the old game crafters had a big role. There used to be things like Decay which kept the economy going and they took that out too. They've also given all the kool items to TCG screwing over crafters once more because really all them items should have gone to crafters.

Pre-CU SWG had a very interesting crafting system but I could never fully get into it due to the user interface for it.  The leveling of crafting skills required an ungodly ammount of repetetive crafting and my mouse hand was going numb after making a dozen items.  Of course crafting was one of the areas of the game that you could not macro (legally).  No matter how much I wanted to get into the crafting side of it, the skillup grind was just too horrible for me. 

I wasn't a hologrinder per se, because I would play a mastered class for at least a month to try to learn the mechanics of it well enough to later decide on a template I enjoyed the most.  I hacked through swordsman according to my first holocron.... then crafted my way through doctor, followed by combat medic, then my last holocron ended up being Bio-Engineer.  I literally wore out my left mouse button early into Bio Eng.  At that point, after all of that crafting I decided "Screw it !!"  I downloaded Auto-It , got my mouse setup to automate the necessary clicks and movements just to get through that last crafting grind.  I knew I was risking a ban in doing so - but my wrist, mouse and sanity were preserved and I continued through as many professions as I could try until the NGE hit.

One other thing I would add is the ability to create diverse items.  Items weren't "cookiee cutter" the way crafting is in most games now.

Crafters had/have experimentation points that are used when crafting an item.  Depending on the item, different base attributes were available to be raised using those experimentation points.  For many items it really only made sense to use one of those options, but the more complex items offered more variety.

A good example was Med Pack crafting.  The crafter had a choice of number of uses and efficiency.  So the crafter would have to choose between maxing out the number of uses (good for general combat situations where you may just need a little boost to health), maxing out the efficiency (for high-end combat situations) or a balance between the two.  If you were going to be in a situation where you would only need a few smaller heals, you went with the Med Packs that offered more uses at the cost of a lower efficiency.  If you were going to one of the higher-end dungeons where you would be taking more damage at a time, you went with the high efficiency Med Packs which provided larger heals at the expense of available uses.

That was really the prevailing theme of pre-CU (and to some extent, current) SWG crafting: balance.  Crafting was a full profession in itself and not just something people did on the side, and the depth of the process legitimized that set-up.  Crafters were not self-sufficient, though, and required interaction with other players and professions.  Combatants needed crafters because the economy was set-up to be a player-based one; loot items were basically junk to be sold off as "vendor trash" and not as useable equipment, but to get good equipment often required certain looted components.

The lack of character levels facilitated this interdependency between crafters and combatants.  If you went with a full crafting template, most aggressive creatures were instant death for you (nothing like getting killed by an aggressive butterfly while checking your factories to ruin your day!).  To get your resources, you needed assistance from combatants.  And combatants needed crafters to get their equipment.  Since the game world didn't sell items, prices were set by the supply and demand of the players.  Not only was there an in-depth crafting system, there was also a great economic game involved as well.

People underestimate what a big difference capped stats and identical items make in the current system compared to the old.  Take this scenario for example--this is how you would make the highest quality weapons in the new system vs. how you would have to make them in the old system:

In the new, NGE system:  As long as you have mid to high grade resources, you can make the best crafted weapons on the server.  WooT! Congrats!  Instant gratification now-now-now gameplay ftw!!

In Pre-CU:  First you have to get the BEST resources available on the server for your particular item.  If you weren't around to harvest them yourself then you have to pay tons for them, because it's one-of-a-kind and you have no idea when or if anything that good will ever be available for harvest again.  A resource equally as good could be available next week, but most likely you'd have to wait about 6 months to a year to see anything comparable spawn for harvesting.  Remember that there are several different resources required for each item, so you can see how difficult rounding up all the high quality ones would be for your particular item.

Next you have to get enough enhancers for your item(s).  As stated above, quality krayt tissues would also be worth quite a bit, the really good ones are some of the most valuable items on the server.  (Notice balance between combat and crafters--combat characters loot very valuable items but he needs a crafter to make use of them.  Interdependece ftw.)   If you're making scout blasters, you're in luck, cause you could get about 3-4 guns from a set, but if you're looking for a high-powered T-21 rifle then chances are you will only get 1 item from that particular set of tissues.

Them when it's all said and done, you get your weapon(s), but they aren't quite finished yet.  Next, you take the weapon(s) to a player with Master Smuggling (and high quality, crafted slicing tools--interdependence between players again) and pay him to slice your weapon for you.  (Better find someone you trust, smugglers ARE space pirates after all so you'll want to find one with a good rep or he may never give your item back.)  Then you cross your fingers and PRAY that you get a damage slice.  If you're unlucky and get a speed slice, you have a decent weapon, no shame in that, but it could be lots better.  However, if you're lucky enough to get a damage slice, congrats, you have one of the best weapons on the server.  And it is ONE-OF-A-KIND.  Amazing, huh?  (You would probably at this point invest in an anti-decay kit, another one of the most expensive items on the server but well worth it since then your weapon would never decay or break from use.)

So yeah, the current crafting system is nothing compared to how incredible it used to be.

Man this thread, actually made me stop just browsing these forums and sign up so I could reply.  A lot of folks have already said it but on some servers certain armorsmiths or weaponsmiths were legends.  A pistol or rifle on my old server naritus from edooka was like owning a legendary piece of gear.  People would look at your character and your gear, see who made it and be awed.  And the prior posters are right.  Gear was unique and appreciated.  The best crafters had just as much status (maybe even more) as the best combat ppl.  They needed each other.  Was a wonderfully deep crafting and economy system. 

Imagine if a game as popular and successful as WoW had the same sort of crafting and economy as SWG.  I know its apples to oranges but it really helped the immersion and replay value of SWG.  Hunting solo or with a team was just as fun as doing dungeon crawls.  I wasnt a big crafter myself, I was always a smuggler and slicer but I remember what a big deal it was as a customer to hear that my favorite armorer achieved a +1% in stun resists or had a rare cache of ore for their next production run.  You'd plan your week around making sure you were first in line to get some of that gear. 

There are three main qualities to the pre-cu SWG crafting system that make it unique to this day

1)  Forgetting exception weapons as loot drops (these were definately rare enough not to cause balance issues), player crafted items were the best in-game and the players drove the economoy.  I cannot stress enough the importance of this as helped foster community relationships.  You sought out the "guy".  That player who had the best stuff.  It was awesome.

2)  The crafting system itself was dynamic, and not static.  Most mmo's let crafters craft the same item with the same stats as everyone else.  This means no differentation other than price.  Resource spawn in pre-cu SWG were dynamic such that no two spawns were ever the same (their statitics were always different) In pre-cu SWG a good chef would make brandy with 400 strength that would last for 40 minutes.  Great chefs who worked hard to gather the best resources could craft brandy with 460 strenght and lasted for over 45 minutes. 

3)  Decay.  I cannot stress enough how important this was also.  Stuff eventually broke and you had to replace it.  This allowed the economy to thrive as people continuosly sought out new gear to replace old worn out gear.

Still to this day the best mmo ever.

regards