When you kill another player's character you are allowed to do whatever you want to the corpse as your own character would act in the situation. Be it loot, butcher the corpse, turn it and everything inside into a war banner (orcs), etc.

If the guy you (or you and your buddies killed) has some really nice equipment that's tons better than what you have, don't hesitate to take what you need or want. It's the spoils of war. But then it all depends on how your character would act, imho.