A bit longish - I apologize
Very interesting. I'm serious. I never thought of this particular element of D&D gaming to be something that required anything other then rewarding the players for their hard work. You, the GM, challenge them with a tough but fair riddle, trap, monster, group of monsters or combination there of and they get to find items the opponent was using, protecting or had otherwise squirreled away. Sometimes they find little to nothing, sometimes they find cool stuff based on the difficulty and what makes sense in the adventure.
Someone mentioned wish lists and a PC being 'due' an item. I hope that's not what it sounds like. If one of my players wants the Ring of Gaxx I should put the Ring of Gaxx somewhere in my Dungeon? I don't get that. How does the player know what magical items or artifacts exist in your campaign world?
IMD&DU (figured I would jump on the abreviation bandwagon too - for future reference it means
In
My
D&D Universe) magic items are unusual, slightly more rare then standard D&D, though generally more versitile and more powerful. I could never really fathom a Wizard wasting his time and money to create a +2 dagger. Wee! It's +2!

It also shows no sense of skill or artistry on the part of the creator. Not only are many of the magical weapons and items IMD&DU well known (some more then others) but so to are those that made them. Great magic artificers will compete with each other to make the most impressive and creative item. Mages are odd like that.
My players and their PCs, due to a few house rules and our general play style, often develop motiffs, whether its a set of colors, a theme or a power type like wind or ice. If items are found in a treasure trove, they divide it easily among themselves based on what 'fits with the character'.
Also, some items are traded between characters for the overall effectiveness of the party. Magic Arrows are a great example. Our primary archer was a Human Ranger and he always got first pick when we found magic arrows or bows. However, he (the Ranger) always made sure that our other two bow enthusiests got a few of each type in case he missed or ran out.
It just seems that somethings of late are a bit 'oversystemed' as it were. Someone else, I believe it was Asmor, suggested that treasure distribution was a part of the gaming economy and the system/rules by which you give it out should not be system-agnostic. I not exactly sure I understand the meaning there but if you're saying I shouldn't have the same general rules for treasure distribution no matter what game I play I'd have to disagree. I follow the same basic theory in every game I run from D&D to Ars Magica to Traveller*.
I try to control the actual money part of treasure very carefully but huge dragon hoards aren't going to be found until you fight a dragon and that's not going to happen for a long time. My idea for magic item allocation however is pretty much always the same (ok, there are much fewer of them in Ars Magica and Traveller*).
With my players I've found that not always expecting to find treasure, having to really look for it and not always being certain of what it is or does makes them both more eager to search but less reliant on one or two items. If the magic is creative enough, they (the players) have to be creative in its use.
AD
*Traveller - When I say 'magic items' I am referring to high technology weapons or equipment above their the players standard tech level. I don't have wands of fireball in my Traveller games.
