How do you handle rewards, be they XP, magic items, or gold?
Full disclosure? I hate bookkeeping. Even while teaching, the act of grading papers and filing student records nauseates me. Keeping track of player XP and doling out parcels of magic items is tantamount to extra work on my part, which I can't stand. To me, each second that you spend with the details of minutia like XP tallies is less time that your party is actually out earning that XP!
As such, I very rarely use a true "advancement" system by rule. Rather than tallying up XP for each character individually, I have a hard and fast rule of "level up every third session". That way, players still get to watch their favorite characters advance and grow more powerful, while eliminating the need to tally XP or penalize players for having life get in the way.
|Loot! Glorious loot!|
However, when I do hand out magic items, I do my best to ensure that they're unique and flavorful. Warlord Kang's daisho from our run-through of The Flood, for example, was inhabited by the spirit of Kang's murdered brother, inciting any who wielded it into an unholy rage. Maerlyn's Grapefruit, from my Dark Tower/Deadlands crossover was scry on others or to cast any spell...but with potentially disastrous results.
The key thing for rewards, though, is that they have to feel special. A generic +2 sword? No one gets excited about that. But when those elements have a background, unique powers, or plot significance? That's when the cream rises to the top, friends.