Wow.com has run a couple of posts regarding loot shenanigans - and there seems to be a lot of discussion over what's "fair" in any given run.
Now obviously in a guild only run, you're going to have specific rules - be it DKP, Loot Council, Free Roll, etc. I've tried quite a few systems in my day, and I can't really support one over the other. No method is perfect, it's up to the guild (and its officers) to police the looting.
Defining the system
Loot Council systems use the opinions of a council (generally the officers) to determine where each drop should be awarded. In a good guild officers will look at existing gear, performance, attendance, attitude, etc., and then make a 'just' award. If the system works right, then players who can benefit from the upgrade the most - and aren't necessarily the newest or oldest player - will receive the loot.
Pros: The player who has been there for the entire duration of the guild, and has just had shoddy luck seeing an item drop, may not get beaten out by the guy who joined the guild two weeks ago. Newer members have a reasonable shot at loot as they aren't competing against stockpiles of DKP.
Cons: This system is easily abused at worst, and even in the best of situations the sense of abuse can run high. It is too easy to say that Tim got an item because he's an officer, or in the right clique, and it can be impossible to defend - even if it was the right decision.
My Opinion: I hate this system more than any other. There's too much time involved in deciding loot, the opportunity for drama is excessive, and you can't plan upgrades. Also, and this is especially true in the first and 2nd raid encounter of an expansion, you have players getting big upgrades over the player who wants it but it's a smaller upgrade. It would take a pretty exceptional guild for me to accept this type of loot policy.
For example: I prep my toons with the best I can get my hands on before entering a raid. I grind rep, get crafted epics, etc. Seeing someone get a loot upgrade that is a big upgrade in gear wise, when they haven't put in the time/effort to get the best gear available to them at that level just encourages laziness.
DKP Systems are more varied than the clouds. At the very base of the system DKP is awarded for downing bosses, spending time on wipes, or contributing to the guild in some way. Loot can have fixed prices or biding can be used. Handling DKP generally requires the use of an addon, some spreadsheets, and a lot of patience. I must say I really don't miss those players who would complain five days after a raid, and 10 minutes before a pull, to complain about one missing DKP point.
Pros: Players are rewarded for active participation, and can easily schedule upgrades based upon DKP within the guild. Depending on the system players can save up for that one big purchase, or spend their lives in the minus DKP column (like I do).
Cons: An administrative headache, players manipulate the system, and you run into DKP hoarding (Shroud DKP helps this, and is my favorite of the DKP systems) by players who don't need new gear. This can lead to players having an excessive amount of DKP, and basically walking off with every first upgrade in the next raid encounter.
My Opinion: I like DKP better than Loot Council, and it seems to be better in 25s than the /roll system. Careful monitoring has to be done, and there is always the issue of DKP =/= currency.
DKP is your place in line, that's it. Also, if someone wants to blow their DKP on a few items and then gquit - technically they've earned the right to do so by earning the DKP. It's a fairly cheap move, but you can't hold it against them IMO
Roll System is where all interested parties simply /roll or use the need/greed buttons. This is typically used is PUG runs, and often has the stipulation of one piece of Main Spec Loot first, with Off Sets coming after.
Pros: Fast, efficient, and minimal down time. With the ability to trade loot it's even possible to hand that item off once you realize you don't need it any more.
Cons: Too easy to get a ninja roller or someone taking a piece that is offset for them, mainset for anyone else. Will get players trying to take pieces as offset, or wanting an item - but for it to not count as their piece of loot as it's a tiny upgrade. Players with hot dice can win often if no checks are in place.
My Opinion: This is what we use in Parabola, and it works very well in our 10 man guild. Of course we're all fairly close pals, and we all have the same base goal - kill everything in the least amount of time possible, while getting as many achievements as possible. Our classes are also balanced, so we have few competitors for standard pieces - and minimal contention for rings/trinkets etc. Now that we're getting the 4+ Idols a week as well, there's less competition for main spec rolls as well.
I don't think this system works as well in 25 man runs, especially when some folks just have lousy dice.
Most folks reading this blog are well enough into the game to know what system they like/don't like, and don't need this writeup. There's a few lurkers though, and maybe this will help them out some.
End the end, stick with something - regardless of the system - make the rules public, and stick to them. As long as you're consistent, you should be in the clear.