Unless you desire to have gunpowder muddying the waters in your fantasy world, it is strongly urged that BOOT HILL firearms be confined to specific areas, and when gunpowder is brought into the fantasy world it becomes inert junk -- ergo, no clever alchemist can duplicate it. Likewise, dynamite and similar explosives become inert.Certainly I didn't want to "muddy the waters" of my early campaigns, and dutifully kept guns out of the picture for many years. Gygax reiterated the sentiment in later years as well.
But I have to wonder if that's really a necessity (or even a good thing), since gunpowder was such an integral part of warfare in the Middle Ages in Europe. The Chinese had gunpowder weapons in the 11th century (or possibly earlier), and the Moors were using cannon against the Christians in Spain in the 13th century. The English had cannon by the 14th, and by the later years of the century they were mounted on wheels and could be (relatively) easily moved from battle to battle.
"Hand cannons" (I love that name) came relatively soon thereafter, but Europe didn't see the first things that would be identifiable as modern-looking guns until the development of the arquebus in the 15th century. Still within the upper range of the "quasi-medieval" time period that most fantasy RPGs seem to embrace.
Personally, I am stricken with an image of dwarven armies with sections of handgonners, and I don't think having arquebusiers unbalances a game any more than squares of pikemen or lines of halberdiers.
I put the question to the floor. Have you ever included gunpowder and handgonnes in your fantasy RPG? With what sort of success (or failure)?