Inventory items will not be reflected on the actual unit art. Items will be buttons within the user interface that the player will press to activate item effects. Creeps drop Treasure Chests or Items when they are killed. Some Neutral buildings sell items. Each Hero can carry up to four items.
Heroes can drop items so that they can pick up or buy new items whenever they want.
Heroes keep the items, so when you revive them at the Altar they can still use them. If we find this is too powerful, we may decide to have the Heroes drop items at death. Not within a game, but it may be possible within the map editor. All Heroes are available at the beginning of the game, but you only start with enough Mana Stones to purchase one. You will need to find additional stones before your second Hero can be bought.