Quality

All items found in World of Warcraft are given a quality rating that is defined by the item text's color.

Poor Quality (Grey)
Also known as salvage items, or "vendor junk" These items are good for one thing and one thing only: to sell to a vendor. This does not mean they are worthless, since some quality items can sell for a decent amount of money (at level 70 some items can sell for several gold). These pieces of equipment will generally have a minimum level to be able to be equipped, but the benefits that come from them may be significantly less than those that require a lower level.

There is one exception,, which starts a quest.

Common Quality (White)
Most common items are either used for professions, spell reagents, quest items, consumable or are bought from a vendor.

There is a good market for some common items. For example, most cloth can be sold at the Auction House for much more than vendors will pay.

Uncommon Quality (Green)
items are usually random world drops, with an overall drop rate between 1% and 10% of kills. Uncommon equipment is usually Bind on Equip, though items dropped from bosses will generally Bind on Pickup

It's a good idea to sell unused items at the auction house instead of to vendors, or disenchant them for enchanting reagents.

Rare Quality (Blue)
Like items,  items generally come from world drops or instance bosses.
 * World drops are randomly dropped from almost any mob in the world (within a given level range) and as a result cannot be "farmed"; The only effective way to get your hands on one you want is to seek out another player who was lucky enough to find it (the auction house helps a lot with this). These items will usually Bind on Equip.
 * Instance drops are typically found on bosses in instances. Most of these items will Bind on Pickup, so take care when rolling for them.

Epic Quality (Purple)
quality items are quite rare and in general have much better bonuses than other items of their required level. Epic items also usually have some sort of passive or on-use effect attached to them or some kind of proc. Like items, there are a few BoE world drop epics. Most BoP epic items are found in raid instances, end bosses in heroic mode instances or high-end recipes for tradeskills.

Legendary Quality (Orange)
items, such as and, are a step up from epic items and are truly exceptional. These items are extremely rare and very few people have them. These items usually require the completion of a long chain of quests, as it is with Thunderfury or Ashbringer, but this is not always the case.

Artifact Quality (Red/Beige)
Artifact items are objects of unimaginable power and are also not yet implemented. Speculated Frostmourne and Book of Medivh will be an Artifact. Artifact items are speculated to end up being "Unique" per server.