Well, imho out of PK looting should be limited in some ways, by either limiting the number, or making picking up an item lag (the latter likely easier to code and a better way in any case). Now, while this subject has been talked over earlier, I would like to present on what I think would be the effects of this. Realise, I don't think we'll see immediate and large changes, but to a minor degree at least.
a) While raiding, you are most allways full looted, due to the lowbies hanging around, and your mates being mid fight, so the g all corpse spamming horde of lowbies will likely grab the stuff. Now, with the change, there will be at least somewhat lessened chance of being stripped bare while raiding/retrieving. The lesser penalty should result in more risk taking, which will mean more fun for everyone.
b) This should, given time, also decrease the amount of the good stuff circulating in the lower rank, which would both make the playing field bit more level (superduper gear at level 20-30 is pretty harsh, and can make you pretty much invincible in that a range) and discourage level sitting, because with the decreased amount of good gear, level sitting becomes less appealing.
c) To the victor go the spoils. If I manage to kill someone with nice gear, I would much appreciate if I was able to at least grab a few pieces, instead of the scavangers getting it all. (This being after all the original idea of limited items, which was one of the original specialties of carrionfields, being a large part of what made/makes this a great place).
There were a few other points, but I can't remember them right now.
Thoughts/input very welcome.

I agree with what elmeri has said. The fact that lowbies loot heroes and get a set they cannot get from the mobs put them in better position compared to those lowbies who go to the mobs to get their gear(I view this as the starting point for the PK situation, so the actual loot gained from the lowbies PK wins are not counted here). Basically, this leads to the fact that lowbie gear is the crappy gear for you and Hero gear is the good gear for you, and this does not depend of your rank. The downside would be the fact that limiting looting would make it easier for caballed characters to get good gear in respect to uncaballed ones, which could cause the caballed lowbies to be more elitistic in respect to uncaballed ones(so, basically the limitation would favour those lowbies who RP with the heroes and befriend them, one way or another, so they would gain an advantage in respect to the characters who prefer looting heroes instead of talking to them, the looting vulture types(whom the current system favours)).

Both free and limited looting have their ups and downs and the answers to the question "what kind of a balance we want to have in this MUD?" is the one that dictates whether looting should be limited or not.

The current system(unlimited looting) favours lowbie vultures, side effects:Heroes do not fight to death as willingly when lowbies are nearby. Lowbies who loot heroes are at advantage compared to those who do not, which means that the system rewards lowbies that loot heroes.

Limited looting favours characters with hero friends, side effects:The factor caused by a precense of a lowbie in the area is reduced when the heroes fight, which makes the heroes less afraid to lose their items. Circulation of gear is reduced in some extent, which means less hero gear possessed by lowbies. Lowbies with powerful hero-range allies are at advantage compared those who do not have them(as the hero gear getting to lowbie range is reduced to heroes willingly transfering it, things on the ground and cabal pits, which gives an extra advantage to caballed characters(who have the same advantage now, but as opportunities are reduced, this becomes more significant). This would also favour those who RP, as it removes the easiest way to get good gear without need to RP with heroes.

Both solutions have their own balance and it is up to the Imms what kind of a balance they want to have in CF. I am somewhat prone to support limited looting in some form.