One of the touchy subjects when it comes to loot rules is the idea of mains before alts. Most guilds that can field a 25-man raid don't need to worry about it as their raid is usually made up of all mains, but the occasion does come up when you need someone's healer alt, or someone's tank alt, to come in to enable the run to happen. The problem is, how do you adequately compensate the person who is having to bring in a toon that is not their main and thus not have a chance at loot and badges on their main for the week? And also, how do you do this without upsetting the other players who are playing their mains and may not feel that it's fair to lose a piece of loot they've been after for weeks to someone's alt?
I've seen it done in a number of ways, some worked well and some didn't.
Having a DKP loot system in place can help. CAN help. It really depends on how this has been set up. For example, I once had a toon in a guild that allowed DKP to be shared between the same player's toons. Like many guilds, they often had a problem with attendance and having the right classes available, so they had to ask players to switch to their alts and sometimes even pug the last couple of spots. Therefore, they had a rule that dkp would be shared amongst a player's toons, and it could be spent on whatever toon happened to be in the raid.
I found that most of the time this system worked well, for a couple of reasons. Firstly, the guild wasn't the most progressed on the server, so most loot that dropped wasn't life-changing. So if an alt rolled on some gear and won, using dkp they had fairly earned, there usually wasn't much QQ. Secondly, most people in that guild were fair and unselfish themselves. The players who were asked to bring alts to the raid always rolled carefully, and if an item WAS of the life-changing variety, they simply wouldn't roll on it.
However, inevitably, there was some loot drama. Quite a few people had only their alts in this guild, their mains in more progressed guilds on the server - including myself. These people earned their dkp in the same way and in some cases provided extra experience and advice (rarely in my case! ;) ), but it was well known that they were playing alts. This caused some members of the guild to grumble a bit when this group won loot. The reasoning was that they already had well-geared mains, and now they were getting loot the second time around. I understand where some of the grumblers were coming from, it's a legitimate complaint. If the positions had been reversed I would have been feeling a little iffy about it too.
Using Loot Council
I really don't like loot council. It just has too much potential to cause unwanted drama. Even if the officers who make up the council are beyond reproach and fair to a fault, people are human and make mistakes. And if decisions are not explained, it can lead to a simmering resentment amongst guildies toward the officers.
I think the only plus for loot council is that having a mains before alts rule won't affect it much. It can be stated at the start of the run that so-and-so is bringing in his pally healer alt to help out so he will be up for consideration on all pally healer gear, but the decision still remains with the loot council. Thus there may be less chance for drama between guild members (other than resentment toward the pally) but more chance of drama both amongst and directed at the officers.
I actually don't mind using free rolling as a loot system. It's not very good for an established guild that regularly clears a substantial amount of content every week, but for a casual guild or a pug raid it's a better idea. The advantage - or disadvantage, depending on your POV - of using this loot system in conjunction with a mains before alts rule is that any QQ will likely be at a guild level, as opposed to directed squarely at the officers.
It really depends on how well the loot rules have been defined at the start of the run. If they've been discussed in depth and set out in stone before the first mob is pulled, this system has a better chance of succeeding. But if not, it really relies on the players in question being fair and unselfish. It relies on those playing alts thinking before each roll - has someone in the run been trying to get this item for ages? Have I got this item on my main recently? Are there a lot of people that need this item? I've been in some great runs where this system was used, way back in ZA. We were all friends and all took the time to look at each other's gear before rolling on loot to make sure it wasn't a bigger upgrade for someone else. It can be very rewarding passing on an item that is a small upgrade to you but a huge upgrade for your friend, especially if they've brought their healer along just to enable your run to go ahead.
In My Guild
If I was a GM, the choice I would make would depend on what kind of guild I had. While the guild was still building, and if we were needing to pug a lot, I would use free roll and allow alts to have the same rolling rights as mains. Then when we became more established, I would use a DKP system of some kind. If we regularly needed to have people switch to their alts to allow our run to go ahead, I would let dkp be shared amongst all the player's toons. But if not, and someone requested to bring their alt along, it would be a strict mains before alts policy, or perhaps an alt's roll for their main spec would equal a main's roll for their off spec.
So I have the first set of rules sorted for my future guild. Well, a tiny, tiny subset. But you have to start somewhere!