Reading this thread made me wonder if D&D is not a single game, but a collection of sub-games. Furthermore, not every group plays all of the sub-games.
My own group hasn't played the treasure-hunting sub-game for years, for example. In 3e, whenever a PC gained a level, the player could equip him however he wanted, up to the standard wealth for a character of that level. In 4e, I give the players the choice between: lose all current equipment and gain a magic item of up to level+1, a magic item of up to the same level, a magic item of up to level-1, and gold equal to the value of a magic item of level-1; or keep all current equipment and gain a new magic item of up to level+1 and gold equal to the value of a magic item of level-5.
Others might play the treasure-hunting game, but play it differently. A DM might place treasure in his adventure but tell his players upfront that any treasure that they do not find will be given to the PCs as rewards or gifts from patrons before the start of the next adventure in order to ensure that the PCs are not under-equipped. The challenge then becomes finding the treasures during the adventure so that they can be used immediately to give the PCs an edge in subsequent encounters.
As for the broader issues of coherence and challenge, I would say my rule of thumb is to have enough coherence to make
informed decision-making feasible. This, to me, is the key point of a role-playing game. Die rolls and guesswork may help or hinder the PCs from time to time, but the main determinant of the success or failure of the PCs should be the
informed decisions of the players.
Yes, I stress the word informed. In my games, I would never deliberately set up a situation where taking a reasonable action would result in the certain or even probable death of a PC unless I make sure that they will receive sufficient warning beforehand. If I happen to slip up (e.g. I forget to provide the PCs with a crucial piece of information) I would rather sacrifice the coherence of the world than let the PC die because of what I would essentially feel to be my mistake.
However, if I design the world and run the adventures carefully enough (not including too many opportunities for certain or probable death, for example

), this is unlikely to happen very often, and handful of times that it does occur, the players will hopefully not notice and never find out!
