There are two kinds of embellishment in the performance of mitzvot, over and above the minimal requirements of halakhah.
In one, the concern is with the intrinsic quality of the artifacts acquired for the purpose of a particular mitzvah.
This is called hiddur mitzvah ("the glorification of the mitzvah").
The extra measure of quality may or not be visible to the casual observer.
An especially fine pair of tefillin, for example, is not necessarily distinguished by its beauty but rather by the extra care taken in writing the scrolls, the high quality of the parchment, or other far-from-obvious details.
Some scribes are not only more exacting than others in fulfilling the basic legal requirements, but are also known for their high degree of kavannah (religious concentration, purposiveness); this too enhances the desirability of their work.
But the more desirable, the more expensive (and sometimes, the harder to obtain).
An added measure of care may be shown not only in the choice of appurtenances but also in the manner in which one performs a mitzvah, the degree of exactitude beyond the minimum requirements of the law.
Hiddur mitzvah entails knowing the finer points of the execution of ritual articles, in order to be able to distinguish real differences in quality from mere local variations or superficial peculiarities.
All too often, people make the mistake of fussing over details that are not at all essential to the performance of a given mitzvah, or even of insisting on features that make a given item less rather than more desirable.
The notion of hiddur mitzvah applies not only to ritual articles but also to such things as food.
For example, meat that fulfills the normal requirements of kashrut may be refused in favor of glatt ("smooth") kosher meat, where the animal was in such perfect condition that there was no need for Rabbinic ruling as to whether or not it was kosher.
Or hiddur may entail insisting on an extra measure of care in the supervision of kashrut, different degrees of scrupulousness being possible.
The Sages have ruled that up to one third more may be spent on hiddur mitzvah, over and above the usual cost.
Some go beyond this, while others do not go this far.
Surely one should be willing to spend at least as much for extra quality in religious acquisitions as one is accustomed to doing in other kinds of purchases.
Still, certain precautions should be taken.
First, one should avoid undertaking a particular hiddur mitzvah that is disproportionate to the overall level of observance one has attained.
This is even more important concerning the overscrupulous performance of mitzvot than the overzealous acquisition of ritual objects, which is, after all, relatively harmless.
Second, one should not spend so much as to lead to friction or hardship in one's family.
In that case, the added merit of hiddur mitzvah is far outweighed by the transgression of causing unhappiness, anger, and dissension.
Third, one should consider whether extreme zeal in the performance of a certain mitzvah is something that can be sustained over time and whether it is proportional to the importance of that mitzvah vis-a-vis all the others.
Sometimes a person who becomes so fastidious about certain minor details neglects responsibilities of much greater importance.
Such disproportion is worse than ridiculous; it can be a serious distortion of one's spiritual life.
Another way of embellishing the performance of mitzvot involves the outward, esthetic dimension, seeing to it that the ritual articles and appurtenances one uses are as beautiful as possible in their design and construction.
This is called noi mitzvah.
It too provides a way of expressing religious devotion, but in accordance with personal taste.
The normal desire to make one's home and its contents attractive is here applied to sacred purposes, highlighting the religious element in the home and the awareness of its inhabitants.
Noi mitzvah applies also to clothing worn on holy days.
It is not as important as hiddur mitzvah, and outward appearance should not be emphasized at the expense of inner quality, either in terms of material outlay or of attention.
Certain very beautiful and expensive ritual objects may not, in fact, even be kosher.
For example, there are Hannukah menorahs that may be very beautiful but are not kosher or suitable for use because their branches go around in a circle, or do not rise up to an even height.
In the same way, a wonderfully decorated tallit may be disqualified because it is not big enough.
–Rabbi Adin Steinsaltz
From "Money" in Teshuvah by Rabbi Adin Steinsaltz