RE: DM Hell: How Not to Give Things to Players in Tabletop Games
It hurt to read this - the tale of woe of an de-rogued rogue ;)
You can make a lot wrong with loot, starting with too much or not enough. And it depends on the group - some players (or chars) prefer gold to buy themselves their dream weapon, some like to "find" equipment that suits them but in a way they never thought about. Best is stuff that seems like it's only good for fluff but later you find out it isn't.
In a Pathfinder campaign my char got a styptic napkin - it stayed pristine white. It didn't really have any crunch effects except a slight bonus on healing that was done immediately afterwards - it soaked up all the blood so the healers could better see what to heal. And it was great to clean your weapons from blood etc. - one wipe over the blade and everything was clean. It became one of the running gags in the campaign: "No, not the special napkin!"
But then, one day, we came into an evil temple where the bad guys were having a sacrificial offering (I know - we've all been there). But here was a big basin where we couldn't get to - we only had access to the small blood filled channels which formed the symbol of the evil god and where the blood flowed to the basin. And when the basin would be filled the ceremony would wipe out the whole continent. None of our spells, nothing we could think of helped. But then came the moment of the napkin: It was dipped into the channel and slowly but steadily soaked up all the blood and the world was saved ;)