One of the neat little underlying themes Tolkien puts in this (and all others of his that I've read so far) book is how the swords of all of our heroes are special, with a lore all their own. Their weapons almost take on the form of characters themselves. Which is why I thought the manner in which Merry and Pippin obtained these swords was particularly ingenious.
There are little hints (strong in some cases) throughout the books that there is something about these weapons that no one knows or is paying attention to. Such as the Orcs revulsion to these "knives" when Merry and Pippin were captured. (They didn't want the souveniers for anything).
And then there is Pippin on the walls of Minas Tirith, watching in terror of the Nazgul as Faramir attempts to get to the city, and wondering something to this effect: "Who can defeat such a foe?" And the answer, of course, is: Either you or Merry, who have the weapons made just for the purpose!
I gotta get a life.
I don't think I can answer the enchantment vs. craft issue from what I've found so far. Yet the "no other blade...cleaving the undead flesh, breaking the spell that knit his unseen sinews to his will" quote that Overtaxed posted seems to imply some ability to break the witch-king's magic, which would seem to be a magical quality itself.
When the blades were found (in the tomb that Frodo was imprisoned in, which according to the appendix is "thought to be" the tomb of the last Prince of Cardolan) this is what was said of them:
"For each of the Hobbits he [Tom Bombadil] chose a dagger, long, leaf-shaped, and keen, of marvelous workmanship, damasked with serpent-forms in red and gold. They gleamed as he drew them from their black sheaths, wrought of some strange metal, light and strong, and set with many fiery stones. Whether by some virtue in these sheaths or because of the spell that lay on the mound, the blades seemed untouched b time, unrusted, sharp, glittering in the sun.
"'Old knives are long enough as swords for hobbit-people' he [Bombadil] said. 'Sharp blades are good to have, if Shire-folk go walking, east, south, or far away into dark and danger.' Then he told them that these blades were forged many long years ago by Men of Westernesse: they were foes of the Dark Lord, but they were overcome by the evil king of Carn Duin in the Land of Angmar.
"'Few now remember them,' Tom murmured, 'yet still some go wandering, sons of forgotten kings walking in loneliness, guarding from evil things folk that are heedless..."
..."Their new weapons they hung on their leather belts under their jackets, feeling them very awkward, and wondering if they would be of any use. Fighting had not before occurred to any of them as one of the adventures in which their flight would land them."
I don't think there's really a solution to that mystery there. So I'm gonna go try and find a life on this sunny day!