A master-crafted weapon follows the normal rules for the weapon, except that you may re-roll one failed to hit roll per turn. Master-crafted weapons are taken as an upgrade for a weapon that is already being carried by a model and should be represented by a suitably ornate weapon on the model itself. Please note that you may not master-craft grenades!
The cost listed in the Wargear section is in addition to the cost of the weapon itself (eg a master-crafted power weapon costs 15+15=30 pts). However, only the upgrade costs are taken against the 100 points limit on wargear for a model (so the master-crafted power weapon above would count as 15 points against the 100 points limit, not 30 points).