Modify views output at field level

This is how we can modify view output at field level

There is issue with theme_views_view_field($vars) API that when we implement this we will get error like
views-view-list.tpl.php (File not found, in folder ./), issue reference http://drupal.org/node/363182

We can avoid that issue by overriding function in our template.php. Function name would be THEMENAME_views_view_field__VIEWID__DISPLAY__FIELDNAME

function THEMENAME_views_view_field__VIEWID__DISPLAY__FIELDNAME($vars) {

}

EXAMPLE:
function mytheme_views_view_field__myviewid__page__myfield($vars) {
  // This will  modify output  for field "myfield" in view id "myview" for "page" display. Apply your logic here.
  $output = 'THIS IS MY FIELD VALUE';
  return $output;
}