(For Part I, click here. I'll save the war stories for Part III on Friday - since Thursday is Melee Academy - since most of mine are GURPS related.)
The power of wishes is pretty broad - you are taking specific game-rule effects out of the equation and giving the players a chance to exercise a direct request from the GM.
Yesterday I edged up to the idea that wishes don't need to be adversarial to avoid being game-breaking. So if you aren't going to fulfill wishes with the most ruthlessly technically correct readying of the wording of the wish, how else can you limit them?
I have some suggestions.
Limit The Gains
Put some limits on what you can wish for; perhaps wishes can only directly affect immaterial objects and the wisher. So you can wish to be smarter, gain ability to cast spells, or ask for palace full of money and clothes and food . . . but you can't wish someone dead.
Perhaps you can wish for means, not ends - so if you ask to be smarter you get a big-ass magical book of knowledge that you can study for a higher IQ. You can ask for great strength but get a guarantee of quick success with your weight training. You can ask for knowledge but instead get a scroll that contains what you wanted to know. And so on - means, but not the end itself. A smooth and assured path to success but you still need to take the steps.
Redistribution of Wealth
Another option is that wishes don't create or destroy, but move and redistribute. Money you wish for comes from somewhere. Magical healing is possible so the wish just brings the health from the same place Minor Healing does. This effectively limits wish to being broad ways to get access to knowledge or the effect of any sort of other spell or power, not a way to transform yourself into Emperor.
Beings granting wishes might do this, and just call it wishing. You ask the djinni for food and he creates some with a different spell and says "Your wish is granted." You ask for money and he leads you to a hoard he's known about for centuries. You ask for a ring of unlimited wishes and he brings you the ring that summons his cousin, because, screw both of you guys.
You can also limit how much they can do via weaker wishes. "Limited Wish" is a good example of this. It's a wish, but it simply cannot do as much. It's simply a flexible spell that affects reality in an undefined but limited way.
Limit The Number of Wishes
How about you just cap how many?
The Great Wish spell in GURPS costs 2,000 energy to cast. A normal human has 10 power, and spells in excess of 20-30 points start to be too expensive to cast. 50+ is crazy expensive. So yeah, 2000 power. It can do a lot, but it's generally easier to replicate other spell effects by just casting those spells, and its ability to permanently grant power isn't that great for 2K.
The 9th level 1st edition AD&D spell was sort of like that. You needed to be 18th level to cast it, and unless you wished for some specified healing/helping type effects you'd need 2-8 days of bed rest afterward. It wasn't clear to me if wish rings had the same, but if they did, I wasn't playing them right.
Three Wish Maximum
This is basically a wishing limit per person. I say "Three Wishes" but it can be any number. You can only handle so many wishes. This can be a hard limit, or an increasing chance of failure, or for skill-based systems a simple result of a failed casting. Fail, and it's done. Perhaps it's an IQ-based limit similar to AD&D's System Shock, and if you fail it, your wishing is done. Simply put, you can't alter reality that much that often.
A Wish Too Far
Perhaps asking for too much snaps you back to where you started, much like the fisherman's wife.
You can also limit wishes a bit by saying all wishes made from one source hang together. If you free a djinni from a bottle and he grants you three wishes, and somehow you blow the third, the first two go with it. Or if the djinni is slain or banished or whatever, the materials that came with wishes he granted all go away - no time limit on that. This makes it safer to ask for limited things, or knowledge, or to speed things that would have happened anyway, because it's harder for them to go away.
The adventure "Threshold of Evil" in Dungeon Magazine #10 took this approach. The wizard in the tower used piles of wishes, but it was strongly implied he could lose it all by wishing for too much some day . . . so he would be very careful with his Wish spells even under deadly assault by a group of adventurers.
This means the more wishes you use, the greater the risk of undoing everything. Couple that with unreliable sources and/or limits on their power, and they might not get pushed to the limit. If they do, you can always end up back in the shack with the fisherman's wife.