I'm also kind of curious as to how they're going to deal with things like procs off weapons. Reduce the chance they occur? Reduce the damage they do? Take them off weapons entirely? It'll certainly be interesting going into Mists to see how such scaling with change on-chance items, at least to me anyway.

This makes the most sense, IMO. Not the grays/whites, of course;) but rather than they'll simply replace your real gear with pre-made gear that they've balanced for the dungeon (presumably with dungeon boss hit caps and such where appropriate). That way it's a completely controlled environment and they know exactly what you're using...no concerns about whether a particular weapon or trinket proc "beats the system" etc.

Of course, it means you won't be able to gear how you want, secondary stats-wise. Unless they toss in a reforger at the start of the dungeon to allow you to rejigger your stats if you want (and competitive leaderboard min-maxers would want).

They literally had a debuff on the PTR that would scale your gear down to 353 to test the new instances. That's probably the mechanic they'd use for challenge modes. It's a technology they already have; allows people to retain control of their character's appearance; doesn't rely on additional reforger/regem/enchanter NPCs at the start of every instance.

Procs off weapons and trinkets already have an item budget (see the different versions of gear from Dragon Soul or Icecrown), so it's likely the damage part of the proc will be diminished. That also goes for damage done by spawned NPCs, like the tentacles from Gur'thalak.

What I don't know is how this affects things like stat caps, like hit and expertise. Anybody paying more attention on the PTR than me? :)

"This makes the most sense, IMO. Not the grays/whites, of course;) but rather than they'll simply replace your real gear with pre-made gear that they've balanced for the dungeon"

The debuff Killik mentioned probably is what they'll do. They'll take your current gear, and scale it's max efficacy to a certain cap. Otherwise, they're assigning themselves the job of creating a complete set of gear for each class, for each dungeon, for all time. Ever time they change the stat weights on a class? Time to go in and adjust the premade gear for every single dungeon. New expansion? Time to go adjust all the gear again.

Having your gear scale down, means they can set some simple rules about hit/expertise remaining at cap, while the stat balance you choose on your gear will still affect your performance.

I was thinking something along the same lines... It would seem unfair for one person to be in a T14 2pc set, and another with a 4pc bonus, and then the next guy with a T15 2 or 4pc bonus. Even if the stats equal out, tier bonuses would be near impossible to balance around.

All in all it will be nice to see how they do this, as what I understood from BlizzCon panels every group entering the instance will be at the same level. Not the same gear level (as in ilvl) but in all considerable ways. The difference would be the players' skills.

Therefore no enchant procs, no trinket procs, no gear procs whatsoever. Every player of a single class/spec will have the same stats. Else it will not be the same starting line. The filthy rich can buy the Avalanche of the MoP while the poor ones will have to go with Hurricane equivalent (I hope you see my point) and the starting situation will be uneven. Or mr. Hardcore has an OP proc weapon (I'm looking at you, Gurthalak) while mr. Casual has a thirteen-in-a-dozen weapon from the latest LFR. Even if the procs are tuned down to some pre-set level it will become an unfair advantage.

Thus the idea of gray rags and a stick as a weapon sounds good. At least the idea of getting the stats normalized, not tuned, for challenge modes.