OK I have come in new to this thread. Just my experience and responce to the questions of "I would never put anything valuble in hold luggage"
We arrived back to LHR from LAS via ATL with Delta airlines. My soft golf bag didn't leave ATL so we had to arrange for it to be sent to our home. In said golf bag were a few items of clothing which included a pair of my wife's £900 Louboutin boots. When the bag was delivered to my house 2 days later the boots were missing. No problem, I contacted Delta customer services and they emailed me a claim form. I sent them the bank statement showing the purchase of the boots along with a photo of my wife wearing them. Within 5 weeks we received a cheque for the £900 (even thouh it said on the form that their maximum liability was $600) and $200 electronic vouchers off of our next flight for the inconvenience caused.
I have had something stolen before and also had damage to luggage. It seems that the first bit of advise you get is to claim off of your own travel insurance, what and pay the £25-£50 excess?! No thanks, the airline is responsible and they should be the ones to pay for it.
As for not packing expensive stuff in hold luggage, how do you expect me to take a video camera, DSLR camera, laptop, Ipods, Archos players, Bose headphones, not to mention my wife's wardrobe of expensive shoes and dresses in 1 piece of hand luggage.
We do use TSA locks on all of the hard cases but the golf bag didn't have a way of using one, and you don't think the baggage handlers can't get hold of a TSA key.