question about partying

when you are in a party, henchman or otherwise, what is/are the factor(s) that determine who gets the item drop?

Some claim that it's random while others claim that it's based on level while others claim that it's all about who does what during a battle. I haven't seen a definitive answers as of yet. However, I personally believe that it's random but that's mainly because I can't quite figure out any type of pattern.

I believe it is supposed to be the same as being in a party with people, being random or such between each player. The thing is people seem to not get any rares (or anything good at all) when grouped with henchman vs. regular players. I tested this myself against thunder lizards a while back, me and 5 other players I got 2 purple drops. The group together got 6-8 purples and 2 golds. I went with henchman twice, each time I did not receive anything over a blue drop. And only one blue drop. Second time through I received nothing what-so-ever... soooo I do not know about that for sure.