foolish_fool

Personally I think a completely badge-based system would be boring. Everyone would end up with exactly the same sets of gear at roughly the same time, and raid guilds standing in org would have the same effect as the pvp-ers standing near the battlemasters - every singly person looks exactly the same.

I am rather in favour of a semi-nonrandom system. I did not actually do aq40/naxx, but the way some of the loot tables from there seem to have worked appears to me to be pretty solid. Basically, I think bosses should drop generic pieces (like a weapon token), which whoever in your raid wins gets to take it to a vendor and hand it in for their weapon of choice. Potentially, you could combine this with the naxx type of "combine with some trash drop other mats". ie. Rage Winterchill drops a bracer token. Trash drop a "mail item shard". Take bracer token + mail token to a vendor in Shattrath and get your Howling Wind Bracers.

This way, rather than having a 10% chance each of dropping 6 sets of bracers, rage could have a 60% chance of dropping a bracer token in which case, vastly reducing the chance you will never see that one drop you need to complete your set - if you are due to get the item, it will come - but you still have an element of randomness, and you still have decisions to make about loot distribution.

I would have:

1 token for each slot + a trash armour type token.
1 token for all 2-handed weapons (staffs included) (and maybe some other token to differentiate caster from melee)
1 token for 1-handers (as above)
Shields / offhands / cloaks on random drop from bosses still (or trash).
rings/necks from boss "head" pieces / reputation / trash.
Trinkets from a dedicated boss (think Priestess Derlissa Heroic - the boss drops a trinket guaranteed every week, just depends which one).
edit: and legendaries on Atiesh-style quest lines.