What is an effective strategy for farming yellow+ drops?

At what point in the game do yellow drops become more common. Currently I am finding them mostly from bosses like the Skeleton King and that is about it. It would seem that these items are generally worth more (gold wise) and may be worth farming to build up my bank a bit for leveling my crafters and/or stash size.

Do yellow items become more common as I become a higher level? Should I focus on just running bosses over and over again? Where should I expend my effort?

(Please note I assume that Magic Find assists with this as well so no need to touch on that part of a potential answer :))

Below level 60, there's none, apart from farming areas with many monsters in them.

However, at level 60, the most effective way should be to do "extended boss rushes":

First you have to know that Blizzard has actually implemented mechanics to balance drops so that purely farming bosses isn't more effective in farming for rares than it is to farm areas with normal monsters/champions, namely the Nephalem Valor Buff .

The original quote from Bashiok is this (although the thread containing it has since been deleted):

You will not be farming bosses. Bosses won't drop the best loot, they won't even drop really great loot. Part of Inferno and our intent with getting people out into the world and hunting and killing lots of different things is putting the best loot on rare and champion packs, and the great thing about rare and champion packs is they have random affixes. They're like a box of chocolates. Murderous, snarling, blood-soaked chocolates. You're not going up against a boss where you know "Build A" is the best way to minmax against it because it has abilities and resistances X, Y, and Z. What is the best build vs. an "Arcane Enchanted, Teleporter, Frozen, Knockback" skeleton pack? Got that figured out? Cause it's not going to be the best against the next pack you come across, and you're going to want to kill that one just as much.

However, there's something extra to this: There's no official word form Blizzard about this (yet), but as many players (among them, me) are currently experiencing, it strongly looks like major bosses (such as the Skeleton King and The Butcher in Act 1) have at least two guaranteed rare-drops as long as you have five active stacks of Nephalem Valor. "Strongly" means that I have done about 10 runs on the Butcher so far and he has dropped two or more rares (along with a higher-than-usual amount of magic items) every single time.

This means that probably the most effective way is to get five stacks of Nephalem Valor as fast as possible, and then farm a certain boss in the Act that you're playing.

Diablo is a little bit different from most other MMOs or RPGs where you expect to find lots of low-power items at early levels, which are gradually replaced with rarer and more valuable loot as you progress.

Instead, you are equally likely to find Junk, Common, Magical, Rare, Legendary, or Set items at any level, and the only thing that changes is which items are elligible to appear, not the actual drop rate.

So "farming yellow drops" is actually very easy - just slap on as much magic find as possible and go kill champions, rares, and bosses. It doesn't matter where, as long as you're killing.