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A great technique is to modify the UI based on context and allowed actions. As I started using Basecamp (37signals) on a daily basis I realized that there are hardly any error messages in the application. If you aren't allowed to do something they hide any UI elements associated with the invalid action. This results in a simpler interface that is more intuitive.

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I don't know, isn't that confusing sometimes? I know that I hate those menus with greyed out items and no explanation why a certain option is not available at the moment. Not even seeing the option at all might be even more confusing, because then I might start looking everywhere for the option to show up.

I don't know why we still don't have interfaces where you can always access a precise, clear, context-sensitive explanation for why a control is grayed out and when it's enabled. The benefits to usability would be huge!

Hiding items will limit your users' ability to discover what they can do with your product. I would minimize hiding and instead de-emphasize unavailable features with explanations why they're not yet available.

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