There are two generally accepted theories about how to distribute loot in raids. Granted, leaving the loot set on Group Loot will be a way to distribute (roll if you need, pass if you don't, one enchanter roll greed for DE purposes) will work. But you're going to hurt peoples' feelings if that's how you choose to do it.
So apart from the chaos that erupts from Group Looting, the choices are either a DKP system (of some sort) or a loot council. These each have their advantages and disadvantages. As you begin running 10-man dungeons, it may not be necessary to make a selection about how your guild will hand out loot; however, by the time you hit the 25-man content, this had better already be decided.
DKP and such systems result in a quantitative approach where "points" are awarded at determined times (usually start of raid, after bosses are downed, end of raid, and perhaps after some amount of elapsed time) which can then be used as currency. Systems exist where only points matter and the loot is bid for auction style. Another popular method is a method to add your "points" to a random roll. The amount of points each person in the raid has is well known (usually posted on a website) and raiders can generally gauge their "purchasing power."
The qualitative analog to DKP is a loot council. This usually consists of the raid leader and some guild officers having a conversation about where dropped loot should go. The loot council can make microscopic adjustments to reward attendance and make sure the loot does the "most good" for the guild as a whole.
In the end, a decision needs to be made about whether your guild prefers a qualitative or a quantitative approach to loot. I'm a big fan of DKP systems. With everything out in the open as far as everyone's purchasing power, raiders can form a reasonable expectation about loot they may get.
However, and this is potentially the controversy, you shouldn't fiddle around with the system and put restrictions on it. Such reasonable requests as limiting the number of items that can be won in a single instance or preventing non-guilded raid members to participate in looting can be very detrimental to the DKP.
A Story - In this story there are only four characters. You must use your powers of imagination to see how this would work for 25 players. Additionally, the loot would not be beneficial to every member of a raid (like it is here), but here you must use your imagination as well, I'm afraid.
Once upon a time there were four characters, Throm, Tigerlily, Beamline, and Crouton. Of them, the first three are in a guild together that uses DKP. Crouton is not in the guild but is sometimes invited to their raids to fill a spot and has built up some DKP. The particular system they use allows the entire DKP total to be added to the roll. If (and only if) the roll is won, half of the winners DKP is subtracted from their total. Going into their raid, Throm has 20 points, Tigerlily has 200 points, Beamline has 15 points and Crouton has 50.
Tigerlily has raided for several months with no gear rewards. In the meantime both Throm and Beamline have received a few upgrades and they spent their DKP on it.
The intrepid four tackle a new boss they've never downed but have a good strategy for finally putting the boss in his place. Lo and behold, the boss finally dies yielding up his treasures. He has three things that everyone in the group wants. The bidding begins on the first, and the tally works out like this:
- Throm rolled a 45 plust his 20 DKP for a total of 65
- Tigerlily rolled a 13 plus her 200 DKP for a total of 213
- Beamline rolled a 90 plus his 15 DKP for a total of 105
- Crouton rolled a 9 plus his 50 DKP for a total of 59
- Throm rolled a 9 plus his 20 DKP for a total of 29
- Tigerlily rolled a 1 plus her 100 DKP (100 were used winning the first item) for a total of 101
- Beamline rolled a 79 plus his 15 DKP for a total of 94
- Crouton passes, saving his DKP for the last item.
- Throm rolled a 35 plus his 20 DKP for a total of 55
- Tigerlily passes. She is beginning to feel guilty and wants someone else to receive something tonight. Isn't she nice?
- Beamline rolled a 90 plus his 15 DKP for a total of 105.
- Crouton rolled a 57 plus his 50 DKP for a total of 107.
There are a couple of salient points in there. Tigerlily could quite easily have rolled and won a third item here. She has the same DKP as Crouton in the example, who has the most DKP of any of the rollers. Note also, that even though Crouton is not part of the guild, none of the guild members got upset with him for using his DKP. They all know that Crouton only gets to fill in when they need extra people, thus has limited chances to increase his DKP total. Even though none of the guild members got the immediate gratification of a new item, they know their turn is coming around again. Especially since the boss was defeated once, they can look forward to a string of kills.
I don't want this post to get too much longer. But if there's interest, I can write up something about the opposing viewpoint or give more examples.