A couple of more UI suggestions, on the 'View Item' screen there is a 'claim this item' button in blue. The button doesn't make much sense to have if I already own the item and I'm giving it away. (Obviously this implies that I'm logged in so the site knows who I am.)

Maybe change the button (only for the item owner) to 'Edit this item' or something that allows easily changing the status of the item from that screen? This could even be button that leads to a screen with only enough fields to say that the item was claimed and by whom.

I shouldn't be able to claim my own items. I can do this from the button above, or by editing the item and selecting my own name from the list. (ie http://www.twoshirts.org/items/rhornsby/scott%2526%2523039%3Bs%C2%AE_bas...) The easiest way I can think of how to do this is just not put the logged in user's name into the list of possibilities.

The pop up that says "Say who claimed this item!" is distracting and intrusive :( Perhaps a better way is to when the user picks 'Item given away', move the user to the section of the page with the list of people, disable/gray out all of the other options except the item status and the recipient, and maybe do some kind of highlight on the frame around the recipient area to draw the user's attention to it. Alternatively, a smaller form with only the list of possible recipients comes up after hitting a 'this item has been claimed' button :)

The first "person" in the list can be empty so as to easily detect when someone tries to post the form without saying who got the item. *Then* a pop up message makes sense, because the user tried to perform an action that won't work.

I understand change is slow, believe me I understand :) None of the suggestions I've made are critical or blocking, just maybe if someone was considering a future UI or improvements maybe these are some ideas :)