We usually just work it out between ourselves, with no set system.
But when we did World's Largest Dungeon, we developed a "Pick System" to make it "fair."
The Pick system
Everyone gets a pick. When you come across treasure, someone can claim it as their pick. If more than one person wants an item as a pick, "dice off" for it. The winner gets the item as their pick. Everything else (which no one wants as an official pick) gets divided, with a "dice off" if more than one person wants something.
Once you have gotten a pick, you (generally) can not have another pick. Once every PC has gotten a pick, everyone can once again "pick" an item. Repeat ad nauseum.
That's it.
Example: Able, Barney, Cain, and Delta are the players. After the first encounter, Barney makes a pick. After the next encounter, Able, Cain, and Delta all want a certain item as their pick (Barney would also like it, but he's already used his pick so he's outta luck). They "dice off" and Delta wins. After the next encounter, only Able and Cain can make a pick. Eventually, they both get a pick: the counters reset and at the next encounter with treasure, any one of them might claim an item as their pick.
We did have a stretch of time where no items were appropriate for a certain PC. In that case, we just let him "accumulate picks" until we started coming across items he could use.
Pretty simple. And it prevents someone from claiming all the good stuff. However, if a lot of stuff is class or race specific, other PCs won't waste their picks on such items if they can't use them, and they'll go to the appropriate PC (and s/he won't have to 'waste' a pick on them).
Since we were in the World's Largest Dungeon, we could not simply "go to the nearest town" and buy stuff. Or craft stuff. The Pick system worked great, partly because we all agreed to it up front so there was no kvetching. Also, we were trying to work together as a party, so we were anxious to have items go to the PC who would maximize the party's benefit the most.