Courtney recently talked about treasure design on his blog. I use treasure for advancement and I agree with his assessment: random generation is makes players come back for more.
Random treasure is also an opportunity to develop your world. How do you explain a dozen hobgoblins carrying 5000 gold pieces? When I rolled it up, I decided that a bunch of hobgoblins were on their way to pay taxes to their overlord. The party then stole the treasure, inadvertedly visited the hobgoblin overlord (an evil wizard) and gifted him the gold by throwing a huge party (in order to gain XP), saw the same hobgoblins arrive at court (!) and had to think about a way of preventing the hoboblins from telling their master what had happened. Luckily, they had a cursed potion of conflict and quickly poured it into the wine used to welcome the hobgoblins. They started squabbling immediately and the party made a getaway. I loved it.
Courtney also says that one should “avoid blurring the line between treasure and junk lying around”. I agree completely! It’s boring. That’s why I don’t allow selling used armor and weapons for half price. It’s junk. Get me some new treasure if you want XP.
In a sandbox, there’s some tension between player goals that involve treasure and player goals that involve plot advancement. What happened to the elves? If there are no dangerous monsters with a lot of treasure, discovering the truth about the elves can be boring. My solution is to make sure that wherever there is plot, there is also danger and treasure. Thus, if the missing elves are all petriefied in a hall (as in my Wilderlands game), there must be gorgons, medusas or basilisks nearby with appropriate treasure. If there are armies of hobgoblins on the march (as in my Red Hand of Doom game), then the dragons accompanying them will have their usual treasure along on the march, carried by the footmen or by slaves.
It’s weird, I know. My sandbox has monsters and treasures wherever the interesting plot elements are. That’s simply how D&D World is. Every peaceful mission goes into dangerous territory, every army carries loot, every museum houses monsters. If there are no monsters and no treasure, I'll try and handle it in two sentences. “You sail down the coast to Tlan and talk to the sage. Two weeks later, you’re standing at the harbor. <insert what the party learns>. Now what do you do?”
If you find that you have a lot of players with a lot of hirelings—on a typical session of mine there will be between ten and twenty characters in the party even though we have only four or five actual players at the table—you’ll find that they can easily defeat “level appropriate monsters” in a dungeon and yet they are easily defeated themselves by higher level monsters such as gorgons, medusas, basilisks and dragons. I find that using a lot of weak enemies works best for me. When they recently investigated a forest hut, I rolled up a random encounter with 6d10 goblins. These attacked in waves of around 15 each, spaced a few rounds appart. It worked very well and there was a decent chance for treasure. It ended up being 11000 copper pieces… Oh well!