I only know of one guild on our server that does that, Tyranny. They're retards. I just couldn't imagine trying to tell someone "No, he gets the loot, you fucking suck at WoW."
Anyways everything is really civilized. No one cries, no one whines. In the end everyone just ends up saying "Grats" or whatever. We have MC on farm status, so everyone will get something sooner or later.
As far as epics go I have a few on my higher level toons.
My 60 Warlock which has since been relegated to my Arcanite transmute/potion/herb bitch still has underworld band. He has 3 pieces of old school Dreadmist set mixed with mooncloth stuff.
My toon I have been playing for the past few months uses a Crusadered Krol in the main and a Agilitied Shadowblade in the off. I plan on equiping the Devilsaur set at 55 but until then I am using Gloves of Holy Might.