Junkloot is cheap, often useless loot dropped by monsters. If the "Destroy Junkloot" option is turned on, it will not show up in loot bags. Low-level characters may want to keep junkloot to sell, but at higher levels, it is often better to turn the option on so as to avoid inventory clutter. Stackable items such as food, potions, and spells are never considered junkloot.
A list of junkloot items can be found at Category:Junkloot.