I have just set up my first mob grinder. The mobs are dropping iron goods (sometimes). When did this start?
That was added in 1.2 This should show you all the different rare drops mobs can give you: http://www.minecraftwiki.net/wiki/Rare_Drops
Yupp. . . Zombies drop iron weapons or ingots occasionally; skeletons drop bows (sometimes with a low level enchantment). I'm not sure about the others. xD