Mouse
Back in the day I would do it as pixel art, a pixel at a time using a program I wrote for the job but these days I work at about 800 * 800 pixels as it doesnt matter how crappy the picture looks at that size with thick lines and smudging etc as when you resize it down to 40 * 40 it often looks a lot better!
Apply a sharpen filter and you are good to go!
When I am in the zone I can spit out an item picture every 5 - 10minutes, I recently drew 2000 images for my other game Lands of Hope over a several week period simply so I could say the items all had images (that game has 6000 base items).
Here is some potion artwork for Legendary Voyage, for this game I am trying something new where I create a template image and the server re-colors parts of the image to suit the material of the object for example you make a Blue steel sword it uses a sword image and recolors the blade to be blue.
It saves on having to draw a ton of images and as it is done server side I can just let it do its thing and look back at all the color variations.
Although I do plan on adding different image variations over time, here is an example:
Item examples