I gotta give a nod to Graylo over at Gray Matter because he's already talked about this and we don't have drastically differing opinions. That said, I'm going to be putting forth what I think makes a good Heroic Encounter.

But before I do that, let's mince words, shall we?

Heroic - Impressive in size or scope; grand; Of a size or scale that is larger than life.
Hard - Requiring great effort or endurance; Difficult to resolve, accomplish, or finish; Intense in force or degree.

I find it difficult to distinguish between the two things in WoW. Perhaps Blizzard intended to have both Heroic and Hard modes for bosses at one time. Now I feel that the two have become quite synonymous. That said, I'm going with my gut and saying that Heroic and Hard mean the same thing in WoW: An encounter that requires greater effort to complete than its non Heroic/Hard counterpart. Notice that this definition mines itself from Hard not Heroic. To me, a Heroic encounter would be identical to the normal encounter only ... bigger. That's pretty uninteresting.

Abilities

Ramping up abilities or having their overlap increase is a cheap gimmick. Yes, it can totally change the dynamic of the fight, but generally it leads to a fight that requires you to juggle the same number of balls in roughly the same way, but perhaps faster. Most of these encounters can be "outgeared" to the point where the normal and heroic versions don't seem too drastically different.

The introduction of new abilities is generally an easy way to bump up the difficulty. Let's take a look at some of the heroic versions that do this. First, there's FL in Ulduar. The abilities used during the fight come directly from player choice. I really liked this idea and especially enjoyed the way loot was handled in the fight. The more difficult the player elected to make the fight, the more loot they would receive if victorious. Unfortunately, there wasn't an On/Off switch. There was no way to change your mind after you started. I don't see the need for such firm commitment to a heroic mode.

This "model" was done with greater success at the Iron Assembly. Regardless of your kill order in previous attempts, there was absolutely no limitations on your kill order in the following attempts. As the fight progressed, each remaining member of the Assembly gained a new ability. Your kill order determined the abilities you encountered and the difficulty of the fight.

Freya offered a FL-esque type choice. Her special abilities came from her remaining guardians. Kill a guardian and it was dead. Irreversible decision. Regardless, Freya offered many choices and many paths to success. This type of player choice creates what I'm going to call a "rich" encounter. The various difficulties can be chosen to play to the raid's strengths. It also allows an encounter to scale, offering raids several authentic and new encounters instead of a ramped up version that only requires more damage and healing throughput.

Implementation

Selecting "Heroic Mode" from a menu is pretty damn lame. While it does allow a raid to reverse its decision quickly, it seems so incredibly lackluster. Where's my big red button?! Where's the DPS check to even activate the hard mode? Where are the mobs assisting the boss that I can either take out first or leave up for a more difficult encounter?

In my opinion, Heroic Mode should be put down. Decisions about how to engage a boss should involve dealing with its subordinates, kill order, pressing an awesome red button, or some other nifty mechanism that fundamentally alters the encounter. This adds a great deal of logic to the fact that the boss now has abilities it did not have before.

Loot

Currently, Heroic Modes offer a higher ilevel gear. I realize that this carrot is probably a must when it comes to voluntarily increasing the difficulty of a fight. Sarth did a good job with managing the loot. Increasing the difficulty offered a chance at slightly higher ilevel gear. Blizzard made it clear that they wanted to do away with loot table bloat, so now we have duplicate items that are scaled up. While I appreciate the desire to have a streamlined loot table, I have to wonder if it is really that much harder to have loot that is only accessible through the Heroic Mode. There was a point in time when you could look at a player's gear and just from the graphics have an idea of their progression. Tier gear has followed this pattern, but is now accessible through regular 5 mans with enough dedication. It would be nice to see some distinguishing gear instead of a distinguishing mount that you can't even ride in the main city (without taking advantage of some glitches).

One easy way to set gear apart is with weapons. Having weapons in the game that only fall from the Heroic Mode will provide exactly the visual recognition that I think should be associated with conquering the top heights of WoW. Even now,