It looks like most campaigns use one of three variations:
Off Time?
The DM strings all the adventures together quite tightly with no off time between them. There's no time for crafting magic items, etc.
Ale 'n' Whores!
Everyone assumes the party just blows of steam; ignore the time between adventures.
Warm 'n' Fuzzy Roleplay
Players can play out noncombat downtime: interacting with dignitaries, going shopping, seeing plays, etc . They can choose to craft magic items, etc. too.