Carrying capacity

All items in DDO have weight. The amount of weight a character can hold at maximum is represented by a bar at the bottom of the inventory screen. As the bar slowly fills from None to Light, Medium, and Heavily Encumbered the character's speed and ability to perform certain actions is hindered.

The amount a player can carry (weight wise) is governed by his strength. The higher his strength, the more a character can carry (Note this is not strength modifier, so increasing your strength to an odd number does increase your carrying capacity even though your strength modifier remains the same). Most players will want to keep a weight below Medium as most detrimental effects occur after Medium Encumbrance. Heavy will greatly slow character speed, and after heavy encumbrance one becomes overburdened and unable to act.

This lists the confirmed carrying capacities based on strength. It also has at what point you reach Medium Encumbrance and Heavy Encumbrance (aka Burdened)
 * Medium Encumbrance caps your maximum dexterity bonus at 3 and gives you a -3 armor check penalty.
 * Heavy Encumbrance caps your maximum dexterity bonus at 1 and gives you a -6 armor check penalty.