Generally, I would suggest using muted colors for more common items and bright colors for rarer items. The benefits of that are that color-blind people still have saturation cues to work from, item rarity is instantly recognizable even if someone's monitor settings are off, and it's intuitive in the sense that common items are less interesting and eye-catching than rare items.
I would definitely stick to a system with limited rarity levels. You mention 5 and that seems fine, but any more than 4-5 just gets complicated. The saturation approach also helps here, though--users know where an item lies on the scale even if they haven't seen that color before.
One further benefit is that you can limit the hue region you pull from for rarity indicators, opening up other hue/saturation regions for other indications. For instance, in Lord of the Rings Online, items had rarity, but then they introduced Legendary items. They were a different type of item all together, so their name color indicated that they were Legendary rather than indicating their rarity. So, for instance (and this isn't a suggestion, just an example), if you wanted to restrict your hue region to yellows and oranges, and you were going to implement the WoW scale of rarity, you could have:
Then, if you later wanted to implement, say items that could be combined with other items, or items that had lore-relevant significance, or items that also had specific effects beyond the regular stat boots, you could set them off with different colors and they would be instantly recognizable.
OTOH, I suppose you could scrap the color theme all together and give the item pop-up a plain-to-fancy border to indicate rarity, also. Or you could just make it white with purple hair and three blue diamonds and be done with it. (Sorry, my kids have been watching a lot of MLP and I couldn't help myself.)