How I do it...
Actually, its a mechanic I've been incredibly fond of ever since I started to play 7th Sea. I'm not yet using it in my DnD game, but in the next campaign I run I will be. (Granted, my players have reached 30th lvl, and started at 2nd... soo, the mechanic is not exactly a requirement

)
I do however currently have a Vote System, which my players all seem to love. At the end of each nights session, I take each player into the next room for a quick one-on-one. Then I ask them to choose the player who did the best in one of five categories: Best Roleplaying, Right Skill-Right Time, Best Kick-A**, Group Coordinator, and Humour.
I leave the definations of exactly what each category means deliberatly vauge, because each player has a slightly differnt idea of what each one should mean. Thankfully, none of my players repeatedly dominate each category. Sure, Chris and Josh are both dominate, charismatic, leader-type personalites and often take the Group Coord. award- but in oen dungeon, when the cleric decided to just storm on ahead and open every single door, and thus lead them into encounter-after-encounter, she got the Coordinator award!
I award some extra XPs based on who wins that nights category. (Average Party Level * 75)XP for Best Roleplaying, and (APL * 50) for every other category.
In my next campaign, which will either be MechaCrusade or OA-Wuxia, I'll reduce the awards to 50/25 and hand out an extra Action Point to each winner.