A Rare Magic campaign variant is one in which magic exists, but is quite rare. Run of the mill adventurers simply won't run across much in their travels because that which exists is generally very powerful.  This being the case, magical items, even the most trivial are highly guarded. The lesser items made for or by wizard's apprentices are closely tracked by the master wizard. If his apprentice falls in the field, he takes care to retrieve his RoP or BoA and/or whatever he had on him. This makes looting a mage precarious, because it could be that his mentor, obviously a more powerful wizard than he, will soon be after HIS property, and possibly seeking revenge on those who slew his apprentice. Many items go through a number of hands, as a prospective weilder/wearer kills the prior owner, only to be killed for the item by the next hotshot. Keeping a magic item on ones person is a bright red "Attack me" sign.

In Heroshi, after the Node Crisis in Xeal, all but the most powerful magic was wiped out. This means that every item in the world, even artifacts, was subjected to a Mage's Disjunction. Since the effect radius was... greatly increased, I'll knock the DC down to a paltry 20. Now, since "A magic item’s saving throw bonus equals 2 + one-half its caster level (round down)", that means most objects with CL 10 and lower were wiped out and most active ones are newly created. Furthermore, Solanthus sent out Mage Hunters to kill magic users and retrieve magic items, supposedly for destruction. Users of divine magic however are as common as ever, but many are wary of appearing like wizards for fear of punishment. They are also careful with the magical items they create for the same reasons as wizards, while being even more judicious in their distribution.

As far as generating a treasure randomly is concerned, just roll a save vs Disjunction for each magic item that comes up. The best part is putting in disenchanted magical items and watching the players get excited and then it turns out to be just a mundane ring with three rubies or just a fancy helm with numerous gems. These items are not a total loss, however, as they are at least masterwork items and possibly art objects.

So what survived?

20 = Roll 10 + (CL 20/2)  ...  Most artifacts, epic and uber major items survived.

20 = Roll 13 + (CL 14/2) ...   A good deal of major items were lost.

20 = Roll 16 + (CL 8/2) ...     Yeah, medium to low end major items didn't fare so well.

20 = Roll 20 + (CL <6) ...      Only about %5 of lesser items came out intact.

Summary:

• Magic is rare and, in most cases, powerful.
• Magic items are highly sequestered by the wizards who create them.
• Magic items are greatly desired, and paint a target on those who own them.
• Minor items are freshly created, likely for use by an apprentice.
• Major items and artifacts are well guarded by their current owners.

Playing in the Rare Magic Setting

The distinction between the haves and have-nots becomes drawn into sharp relief like never before. For about the first 10-12 levels, the best equipment you own is masterwork and made from exotic materials. You must surely own one or more homes, a shop, or even a keep or temple. So far the rule concerning mages has been "Never go one-on-one with a wizard." Either he's too much of a BA for you to take or his mentor is. Giants and other big, strong foes are very much a danger, because they will hit you... and it will hurt. This situation makes the role of the healer ever so more important. Having a cleric or a good stock of Cure potions becomes a crucial requirement before setting out. Also, alchemical items can provide effects to simulate spells. Not to say that you can't have a wizard in your party, but having more than one is rare. Wizards are adventurous, after all. So what kind of foes can one face without arcane magical aid? Many demons and devils DR can be bypassed by a special material alone or one blessed by a good cleric or wielded by a paladin. As a general rule, as long as you avoid things bigger than you, you can take about anything through non-magical means. What can't you face.... except for dragons? Well, dragons haven't been around for a while, so no worries there. So this stage of the campaign should focus more on adversaries that are on the same ground as the party... other humanoids. Monstrous races with levels or if you want to, elves, dwarves, gnomes, and the whole standard array of bandits, soldiers, and thugs.

Then you get promoted. There's a point where your party magic users are able to make their own magic items and the group is tough enough to defend their property. They can even kill a mage and take his stuff, and face his master when he comes calling. Course, since they're built their reputation up at this point, that wizard likely avoids a direct confrontation and sends minions instead, or he calls upon allies of comparable power. In the end, it just might not be important enough to him to retrieve the thing. Furthermore, they can handle themselves well enough to go looking for lost or hidden items of power. Once they're well equiped, it's regular D&D after that.