Junk: Vendor it.
Whites: Salvage it with a crude or basic kit.
Greens: Vendor it.
Blues: Vendor it.
Golds & Oranges under level 70: Check the trading post, sell it there if it's got a good price, otherwise vendor it.
Golds after level 70: Check the trading post, sell it there if it's >= 25 gold, otherwise break it down with a master salvage kit.
Oranges after level 70: Check the trading post, sell it there if it's >= 50 gold, otherwise break it down with a master salvage kit.
Violets: Obviously, you recieved this by mistake. It was actually meant for me. Send it over, and all will be forgiven.