The following graph assumes a weapon is used many times during the course of hunting against an equal number of large and small foes.  Given those two things, the average damage a weapon does is easily computed and plots about as follows:

Looking at the data yields fascinating results.  The best weapons, taking only average damage into account, proceeds as follows:  Oak Stick at Insight 1, Loures Sabre at Insight 8, Hatchet at Insight 13 (Or Smithed Loures Sabre - See Notes), Dragon Scale Sword at Insight 20, Wooden Club at insight 50, and Stone Axe at insight 95.

Lines 1 and 2 are interesting trends in weapons.  Three points define a trend, and these two lines are dead-on.

Line 2 is the "Ultimate Line".  No weapon, it seems, may surpass this line without some drawback.  All 2-Handed weapons (Blue dots) surpass this line, the original shovel was WAY up there (Grey dot) before it was spayed (It had no real drawbacks to justify its immense power), and the final weapon to surpass this line is the Chain Mace (Red dot, near the top) which pays for it's superiority by being restricted to Warriors and having 250k value and 5k durability (Repairs are often and expensive).  The line is defined by the Dragon Scale Sword, Wooden Club, and Stone Axe.  These three weapons are the pinnacle of weapons technology for the masses in Temuair.

Line 1 goes through Oak Stick, Hatchet, and Giant Club.  This seems to be the second-best line, the amount a more easily obtained or just generally better-than-average weapon is allowed. (Note that Loures Sabre (and all it's smithings) and the extinct Kobold Whacker exist between Line 1 and 2.  I suppose they qualify as 'Very Good'. heh)

The pairs of dots below Line 1 are the standard sword pairings, each does equivalent damage, one is better for Large, one for Small.  The third sword is some groupings is balanced between Large and Small. (Equivalent swords are: Dirk/Epee, Loures/Claidheamh/Broad, Battle/Templar/Masquerade, Bramble/B.Death, Long Sword/Stilla)

Two points fall below the pairs of swords, indicated J1 and J2.  These are the 'Junk' weapons.  They have no real value in combat.  J1 is the spayed Shovel, totally pointless to use on monsters; the Bramble is much superior.  The new shovel is only useful to Masters for their quests.  *sigh*  Pity, it seems such a nice weapon for peasants.

J2 is the poor, poor Spiked Club.  Why this weapon is so poor is unknown.  It does 55 damage on average at 66 insights.  Very poor... Long Sword does 63 average at 56 insights.  Along Line 1 the Spiked Club would be 93 or 94 average, so stats along the lines of S:57m97,L:90m130 would fall into that line.  If it were to join it's kin, the Stone Axe and Wooden Club on Line 2, it would be more like 126 average damage, so something like S:110m130,L:120m140 would be supreme at 66 Insights.  But the Spiked Club is only S:40m60,L:50m70.. Just.. pathetic.  But it looks painful.. For what it's worth.

The Red dot next to J1 is the Scimitar, also fairly useless.  Not as bad as the other two, but still not good.  Only Warriors can use it, though, so little loss to the community at large. heh.  Similarly, the Cutlass falls well below Line 1, but is more easily obtained than a Talgonite Axe or Good Dragon Slayer, both of which do comparable damage.

As a prediction, the 99 insight ultimate 1-handed peasant class weapon would average 175 damage, so that's, say, S:140m180,L:170m210.  The only 99 1-handed peasant class weapon to exist to date (so far as I know) is the Good Dragon Slayer, and that's nowhere near Line 1, even. (102 average for the GDS, the Wooden Club is 102.5, at half the insight.  I guess "Junk" could include this.)  It's strange, since it's a VERY rare weapon.  I suppose it's merely a status symbol.

Miscellaneous Notes:
Exactly what formulae are applied to the weapon damage to generate the actual damage are not fully known.(To me, anyway. heh)  Many things, like Strength and elemental interactions, affect the outcome.
Most of this data comes second-hand, but I trust the source.  Of course, weapon damages are subject to change at any time.
Lines 1 and 2 are not proper statistical average of the data type lines, they're just fascinating to me.  A real mean line would not, um, mean much with the prevalence of the 'Dark' weapons, anyway.
Oak Stick, and even the Stick, are actually superior weapons to the Dirk and Epee, which is odd.  Less Durability must be the balancing factor.  It should also be noted that at insight 4 one can use a Good Dirk/Epee, which is superior to Sticks.  Fine Dirk/Epee at 6 insights are better yet, but hardly worth the effort to obtain; Loures Sabre can be used at 7 insights.
The Hatchet's superiority is dubious, it only does on average 2.5 damage 'units' more than a Loures Sabre, and has half the durability.  A Good Loures Sabre is almost its equal and a Fine one easily beats the Hatchet, at only 11 insights it does 27 average, as opposed to Hatchet's 25.5 at 13 insights.
Four weapons are plotted at 23 average damage; that's the Loures Sabre level.  Amazingly, the next pair of swords are equivalent in the long run to the Loures Sabre - The Claidheamh and the Broad Sword.  The fourth is the extinct Kobold Whacker.
Smithing weapons increases their power, but only for the standard sword pairings.  Two-handers, too.  Good and Fine are all that can be created by Aislings, Grand and Great must be found, and I don't recall ever seeing any 1-handed sword but Stilla and Long Swords being dropped.  Smithed weapons are more powerful, but perish upon death.
Also not mentioned under the "Junk" category are Polyp Puppets.  They only do 1m1 damage, but Kobold Bladders can't really be considered a weapon.  They're purely decorative.  I haven't checked pets yet, but I'd guess they won't surpass a Loures Sabre in damage.
It is interesting to note that between 50 and 95 insights there are quite a few weapons, but few can surpass the sublime power of the Wooden Club.  The Scythe has many drawbacks (AC+2, Hit-2, and only 1 insight from the much better Stone Axe...), the Talgonite Axe does LESS damage, and the Giant Club is only marginally better.  Perhaps this is a good argument for raising the Spiked Club up from the dregs of the weapon rack; 45 insights with the same weapon?  To be fair, this is the range Warriors will begin to use the superior 2-Handed weapons in; only Peasants and Warriors who refuse to part with their shield are "stuck" with the Wooden Club. (Note that shield-using Warriors will go to Chain Mace at 95, not Stone Axe)
Not plotted are the 2-Handed Warrior Class weapons (Hy-B Axes), and the Escalon.  They'd be off the chart.. heh
My thanks to Vamistle for providing so much information on weapons on his site, The Warrior.  Truly a magnificent site.
I've probably made more than a few errors in my calculations, so take this for what it's worth - something done to kill an afternoon. hehehe