Well, as I said, I did know more on this topic before, but I believe I've retained enough to tell what I can remember about the Masamune.
The Masamune is a sword of legend in Japan. There are various different tales about them, but I'll see if I refer to only one or not; Masamune, is actually the name of a sword smith. He is called that, however, his real name is Goro Nyudo. Anyway, it is said that the Masamune was a sword that sheds no blood upon its cut. (Hence, no blood is seen when Sephiroth uses it to kill a particular character in FFVII) Well, Muramasa, another sword smith, swore that he'd make a better sword than Masamune, and so, challenged him and his sword. Muramasa placed his sword in a river, and the fallen cherry blossoms in the stream all were cut sharply in two. Following this, Masamune put his blade into the river. All of the cherry blossoms moved around the sword. Not one was cut. And so, Masamune won.
That's just a legend though, so who knows if it's true. However, there are a few swords still around with Masamune's signature on them. They have a distinctive style, I've read. A wavy sort of motion on the blade. It's quite interesting to read about, actually.
So, as to why it's used in so many games, I'd say that mainly because it's a popular sword of legend. Masamune is said to be one of, if not, the greatest sword smiths of all time. If this didn't answer your question, let me know. I'd be happy to try and answer it correctly.
EDIT: I spelt 'greatest' wrong, that's a new one.
Edited by - Black Mage on 5/18/2003 8:20:17 AM