Looking for items is one of the biggest parts of Diablo 3. Monsters have a chance of dropping a number of types of items: Normal, Magical, Rare, Set, Legendary, Artifact, and Runestone. Items can still be picked up after you kill a monster, but gold is now automatically picked up when you walk near it. In multiplayer games, only items that have dropped 'for you' can be seen and picked up. This means that there is no more ninja looting someone elses gear, and no more races to the boss once it dies.
The inventory is a 10 by 6 grid. All items are either 1 by 1 or 1 by 2, meaning that a player can hold much more in Diablo 3 than they could in Diablo 2. The size of the stash has also been increased, and there is a new shared stash that all of your characters can access.