But what's this hats?
And picking things up my ass?
Oh hai thar werdo.
Item drops have replaced the milestone system of getting stuff.
You can find hats and weapons (regardless of whether you have them or not) as any class on any team. eg. you can get the Huntsman (Sniper) as a Heavy.
At the moment, the system is glitched and items don't come that frequently. Some people have played for at least 24 hours without a single item drop.
Valve will patch this soon and will add the ability to trade items.