Hi,
One of the characters in my group has cast detect magic permanently on him.
He has decided that his character will always automatically
use detect magic every 60 feet or upon entering a new room (we are playing a
dungeon crawl with lots of traps and riddles).
Am I being too strict, given that he had to spend some gold/xp to make it
permanent, when requiring him to actively announce when using it in character?
Otherwise, I feel that the game balance would suffer if I immediately present him any
magic related information without being asked for it, instead of the players
having to decide (and remember to do so) which area/items they want to check
for magic.
You will regret doing that - you'll end up with something very much like what
AGC had happen after
The Treaty was broken.
I would be glad if you could give me your opinions and advice on how you would
handle this situation.
Let him have the info out of combat - do remember, though, that there is a delay. If there's anything actively trying to kill him in the room (anything where individual rounds would matter), he only knows whether or not magic is present - not how strong, or where.
It's also pretty easy to foil - a Lightning Bolt trap, set to fire down the hallway when a leaded door is opened wouldn't be detected through this method - before the door is opened, lead blocks Detect Magic, so nothing is seen. The trap doesn't have any detection methods outside the room in question (it's only looking at the door) so there's no magic outside the room to detect. After the door is opened, it's too late (let the guy who invested in the Trapfinding class ability, Search, and Disable Device find something like that, though). Variations use any spell you like - Haste on those already in the room, a Summon Monster, whatever. Likewise, a trap that incorporates the 1st level Sor/Wiz spell Magic Aura won't be located. Neither of this type should be common, though - your player is being reasonably smart and creative, and such should be rewarded by success in his endeavors.
Mind you, traps in isolation are boring. They're "roll search, roll disable device, move on". They need to be combined with creatures to make non-boring combinations. A few simple examples...
The Inflict X wounds trap on the floor, where a bunch of undead are located (the undead heal every round that they're in contact with the floor, the party gets hurt every round). The undead actively prevent any attempts to disable the trap, and you've got a reasonably memorable encounter.
A bunch of 10-foot concealed pit traps in the local BBEG's main chamber. Sure, they're ... what, CR 1 or 2? But it prevents the Fighter from charging the BBEG and one-shotting the d4 hit die wizard ... and the delay in getting out of one is painful, even if you can make the Climb or Jump check easily (hint: the Fighter or Cleric in full plate won't). Plus anyone in them is denied line of effect to anyone elsewhere in the room. The BBEG, of course, favors Air Walk, Fly, and similar effects, and simply goes right over his own pits.
A ceiling of stone, supporting a large amount of loose rock, with the ceiling having been made of stones created by way of Transmute Mud to Rock, combine very well with a bunch of low-CR disposable minions with potions and a mechanical alarm pressure-plate just outside the door. Party trips alarm, minions drink potions, and drop potion bottles as the party enters ... inviting a quick Area Dispel, which will revert the ceiling to mud, causing the rocks to fall. Read up on the cave-in rules; they're nasty. As a variant, include a one-shot Transmute mud to Rock trap, set to go off when the mud hits the floor (instant cement). Make sure to include some form of cryptic warning - you don't really want a TPK that looks like "rocks fall, everyone dies".