I can see some rogues being very happy with something like this. But I would not allow such a weapon for any good aligned characters (I mean, draining somebodies vitality and use it for a temporary egoistic gain, it sounds pretty evil if you ask me)!
Having said that, let answer your 3 questions:
does this weapon fit within the rules?
Well, Ernir worded it most appropriate in one of the comments: "it isn't illegal, but it isn't exactly conventional either."
So, let's identify the non-conventional parts first:
- 'a natural +1 improved threat range',
- an extra improved result in case of a natural 20.
The first one is the very unusual; as far as I know (my knowledge is rather not complete by a long shot), there is no published weapon or effect that adds a stackable improvement to thread range (=critical range). There are improvements to the thread range of weapons (keen is in the core rules), but all of these carefully stipulate the non-stackabity. So, quite unusual indeed... Yet, this is a short sword, so -as many have pointed out- improving its thread range basically gives you a rapier at -10 gp, which is not that special; sure, it is nice, but it could also just be a rapier instead.
The second non-conventional idea is also unheard of... or is it?
The Vorpal magic weapon special ability, from the core rules, only functions on a natural 20. While it does toy with the 'natural 20' dice roll to trigger a special effect, it differs from what you propose: in the case of the Night blade, it exceeds the effect of a critical hit, while in the case of a Vorpal-weapon, it convines the effect to a natural-20 critical-hit. Yet, the 'natural-20' is a common term and what you propose seems to be a balanced method for differentiating the might of the magic in question, without rolling any extra dice. I would say this is an interesting method of differentiating and would not mind seeing it used at more instances (just sharing my opinion).
Let's take a look at the more conventional part next:
The +3 enhancement is pretty straight forward, so I'll just skip this one.
The Constitution damage + temporary hit points is a classical 'vampiric' weapon effect, translated into 3.5 edition rules. In AD&D 2nd edition, vampiric weapons healed the wielder when dealing damage to the victim (exchange rates varied). In 3.5 the vampiric healing was replaced with vampiric temporary hitpoints. In your case the exchange rate has been set to 1 point of damaged Constitution to 1d6 temporary hitpoints. This is not outside the ordinary (again, in my opinion).
Note: as done by both the other answers, I skipped the 'only up to the wound hit points part, it is just silly and contrary to how temporary hit points normally work.
The exclusion of creatures normally immune to critical hits from the special ability is not unusually either (in fact, it is worded almost exactly as worded in the core rules). Yet, I would advise adhering the wording as used in the Magic Item Compendium, which would be "... against any living creature.", because I think it better reflects common sense.
You could invent a new sorcerer/wizard spell for this: It sounds a lot like a Vampiric touch spell, only a bit more like what a vampire does. Let's make a spell effect that does what is asked for:
Vampiric Touch, Greater
Level: Sor/Wiz 4
Components: V, S
Casting Time: 1 standard action
Target: Living creature touched
Duration: Instantaneous/1 hour; see text
Saving Throw: None
Spell Resistance: Yes
You must succeed on a melee touch attack. Your touch deals 1 points of Constitution damage per two caster levels. You gain 1d6 temporary hit points for each point of Constitution damage you deal. When the subjects Constitution is reduced to 0, it is killed. The temporary hit points last for 1 hour.
(It could do with a better name)
The only thing left to pick apart is the part which reads: barely reflects any non-magical light:
I interpreted this as 'fluff text' -just as G0BLiN did- and I would like to quote:
"(...) I gave it no price or mechanical consideration - in my game I might occasionally use something like this as a description for a PC's successful save against an illusion, but I wouldn't give him any bonus to the roll."
If you would want this to be an actual special ability which may help in, for example, identifying illusions (as suggested by Scott), you should award a value to this feature. I would not rate this as mighty enough to warant a +1 equivalent (see costs below), so instead, you could maybe invent some sort of special material and add some fixed cost to the magic weapon price (which I did not):
This rare dark metal, which is thought to have once fallen from the stars, barely reflects any non-magical light. Runes or symbols forged into magical items upon creation can be made to faintly glow in magical light, but leave no trace otherwise; a property highly priced in some cultures. Items made of Deep iron cost four times as much to make as their normal counterparts and any magical enhancements cost an additional 2,000 gp.
(I put a bit more fluff into it than needed, pick the parts which you like)
So, that leaves us with the question of appraising this weapon and determining its aura:
For creating a magic weapon like this, the creator need the feat Craft Magic Arms and Armor and access to the spells needed to imbue this particular special effect; I came up with 'Greater vampiric touch' for this (see above). In addition, we need to determine the creators minimal caster level for creating this weapon. The magic item creation rules say that the caster needs at least three times the level of the base enhancement or the level of the spell required, whichever is higher. In this case that means we need a caster level of 9.
To figure out which type of aura is present, you pick the most prominent aura affecting the weapon. In this case, both Ability damage and Temporary hit point are both necromantic effects. So, the Aura would be 'necromancy'. To figure out how strong it is, you consult the table in the spell Detect Magic, in this case the magic item's caster level is between 6th-11th, so you get a 'Moderate' Aura, giving you 'Moderate necromancy' final result.
The price of the weapon is based on the +X total enhancement number. This is a combination of both its enhancement and any special abilities it may have...
In my opinion, the ability you describe would be rated as +2 equivalent (compared to other abilities of more or less the same potency), but since it only kicks in upon a critical hit, I would rate it as +1 equivalent.
So, the weapon has a total value of +4 equivalent enhancement. Consulting the table on Magic Weapons tells us that a +4 equals a base price of 32,000 gp. For the total price you need to add the cost of a short sword (10 gp) and the cost for a masterworks weapon (300 gp), so total cost is 50,310 gp.
The monetary cost of the weapon is 50% of the base price of the weapon + the cost of the masterwork weapon itself, so in this case that amounts to: 16,310 gp. In addition to this, there is a XP cost, which is 1/25th of the weapons base price, which is 1,280 XP in this case.
So, that would give us:
This plain looking +3 short sword has a remarkably sharp blade which results in a natural +1 improved threat range (18-20/x2). The sword's blade is a dark metal which barely reflects any non-magical light. Upon scoring a successful critical hit against any living creature, it deals 1 point of Constitution damage. The sword wielder gains 1d6 temporary hit points. These temporary hit points last for 1 hour.
Moderate necromancy; CL 9; Craft Magic Arms and Armor, Greater vampiric touch; Price 32,310; Cost 16,310 gp + 1,280 XP.
The realistic price for this weapon
The rules as detailed by the magic weapon creation result in rapidly increasing prices for magic weapons, many times unrealistically so. This is also recognized by the Magic Item Compendium, which has lowered the prices for many items previously detailed in core books.
However, above all else, I think (as also mention by others) that the +2 enhancement and the special ability as described don't match nicely; how about:
This plain looking +2 short sword has a remarkably sharp blade which results in a natural +1 improved threat range (18-20/x2). The sword's blade is a dark metal which barely reflects any non-magical light. Upon scoring a successful critical hit against any living creature, it deals 1 point of Constitution damage and the wielder gains 1d6 temporary hit points. These temporary hit points last for 1 hour.
Moderate necromancy; CL 6; Craft Magic Arms and Armor, Vampiric touch; Price 18,310; Cost 9,310 gp + 720 XP.
Night blade (greater)
This plain looking +3 short sword has a remarkably sharp blade which results in a natural +1 improved threat range (18-20/x2). The sword's blade is a dark metal which barely reflects any non-magical light. Upon scoring a successful critical hit against any living creature, it deals 1d4 point of Constitution damage. The sword wielder gains 1d6 temporary hit points for each point of Constitution damage inflicted this way. These temporary hit points last for 1 hour.
Moderate necromancy; CL 9; Craft Magic Arms and Armor, Greater vampiric touch; Price 50,310; Cost 25,310 gp + 2,000 XP.
with a realistic cost included.