You will frequently find treasure on the bodies of the monsters you kill. Generally, more powerful monsters carry more valuable treasure, which is indicated by the monster's treasure type. In addition, you may run across type one and type two treasures wandering through the realm. A specific type may contain items you can use in your travels or gold and gems which can be used to buy things at the trading posts.
The chance that treasure is cursed is based upon treasure type. The more valuable treasures have a greater chance of being cursed. A cursed treasure knocks energy level very low, and adds some poison.
Here are the various items found for specific treasure types:
holy water - kills assorted faeries.
amulet - protects from cursed treasure.
holy orb - subtracts 0.1 sin.
druid - adds experience.
smurf berries - cures a small amount of poison or heals some energy and fatigue.
short sword - a sword will add its plusses to your strength.
Type four (scrolls)
shield - throws a bigger than normal force field next fight.
haste - greatly increases a character's quickness for the next battle.
increase strength - At the next encounter, strength is greatly increased.
pick monster - allows finder to pick next monster to battle.
treasure map - this will tell you the distance (+/- 15%) and direction to the treasure trove, which contains a few gems and some gold.
power booster - adds mana.
shield - a shield that is generally larger than the one from treasure type two.
lembas - cures a moderate amount of poison and all fatigue.
tablet - increases brains without restrictions like books.
Treebeard - heals and gives a permanent increase to energy.
long sword - normally larger than the treasure type three sword.
Aes Sedai - Cleans 33% of sin, or all of it if sin is low enough.
Gwaihir - allows finder to move anywhere in the realm for free.
Hercules - adds permanently to strength and gives some experience.
athelas - cures poison , blindness and fatigue completely, heals to max, and makes player immune to the next local plague
quicksilver - improves quickness.
staff - allows the player to become steward by going to (0,0) when there is no king or queen.
Wayland Smith - improves a character's shield, sword or quicksilver.
ring of power - evil artifact that, when used, allows one to hit much harder in battle and saves the user from death. Limited number of charges. Beware, though, some rings are cursed...
Gandalf - heals all wounds and blindness, and casts all scroll spells on a character for their next combat
Silmaril - adds permanently to quickness.
nothing special - just didn't want you to think I can't count.
The One Ring - Like a ring of power, but permanent. Destroying the One Ring in the Cracks of Doom when eligible for the throne will give you a golden crown, which lets the player become king or queen.
Any treasure type 10-14 monsters may instead carry a type nine treasure. The Dark Lord may also carry normal rings of power as well as the One.