While part of a party most players will expect that if they need an item they should get first pick at it before those who want it for greed. For example, a party consisting of a Rogue, a Mage, and a Warrior walk into a bar and loot some rare cloth armor. All of them can potentially wear that armor, but only the mage really needs it, the rest will likely just sell it or give it to an alt (see Greed). Therefore, it is expected that the warrior and rogue will allow the mage to have it by not rolling on the item.
Its not always obvious who needs an item, perhaps the Mage already has better armor or perhaps the party loots some crafting items and its not known who has what professions. Prior to patch 1.9, people would say "n" or "g" to indicate if they want an item for need or for greed. Now this declaration of need or greed is built into rolling for an item. If everyone declares greed then everyone rolls for the item. But if one or more people declare need only they roll on the item.
Loot Level Edit
There is a Need before Greed party loot level which is an attempt to enforce the above etiquette. Those party members who can't use an item (such as mages and mail armor pieces) or who can't use the item most effectively (such as warriors and cloth armor pieces) aren't given the chance to loot an item until the party members who can most effectively use the item have the chance to loot it.
Problems with Need before Greed Loot Level Edit
The Need before Greed Loot Level takes into account whether or not you can use the item now, not in the future. This means that if a mob drops a piece of mail requiring level 37, the level 36 warrior in the party will not be able to roll on it. Similarly, a level 39 hunter will not be able to roll on mail items even though they will be able to use it next level.
Off Specs Edit
As Hybrid classes such as Druids, Shamans, and Paladins) and other classes capable of performing multiple roles such as Warriors and Death Knights, items may drop that may be used for any of these roles; NOTE: This may not apply to Priests because they may or may not use the same gear for both healing and DPS. Many players have different perspectives on rolling for off spec loot. Many players agree that gear rolls should be main spec only, which in most players' opinion, is the role that they are currently playing with, even if it is the player's Secondary spec. In a raid setting, it would be more beneficial to the raid if the active tank is allowed to roll for a tanking item over a Paladin or Warrior currently acting as a DPS.