While items in WoW won't "wear down", they will have a quality rating. Each type of item, normal through unique, can have different quality levels. The quality ratings as of the E3 2003 build were: Standard quality (grey), Good quality (green), Superior quality (blue) and Epic quality (blue violet).
Monsters will drop equipment when killed. However, the drop will be drawn randomly from a specific item class for that monster type. If you recieved a "Super Sword of Fire" the first time you killed a monster, it wouldn't necessarily be the same loot the second time. This was designed to discourage camping.
There is ample storage space in World of Warcaft, and players will not need to create "mule" characters to store extra items and equipment. In addition to the 5 bags and backpacks you will be able to carry, there is also a top-notch banking system for you to store your treasures.
Want to go knock some skulls with a powerful Mace or a strong Pole-Arm? How about shoot from afar with a Dwarven Blunderbuss Rifle or a sturdy Night Elven Bow? Perhaps you will master the art of magic, and fight with a Wand or Staff? In World of Warcraft, the choice is yours...
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