Introduction
D2 can be a little overwhelming in the variety of options you face at every turn. The affix system for item generation provides mindboggling numbers of potentially unique items, character skill trees allow for broad customization of character builds, etc. Here I will attempt to cut through the clutter by listing a small set of priorities and their importance to me. Your mileage may vary.
In order to understand my spin on the topic you have to know a little about my play style. Most importantly, I'm a big fan of permadeath even in softcore. Dying to lag, windows bs, or griefers is another matter. There is, I find, some satisfaction in a good death.
The list below is a little biased towards chosing items, for obvious reasons. General stuff (like not biting off more than you can handle) seems fairly intuitive. Maybe I'll come back to it later.
1. Don't die.
1a. Don't get hit.
Run away. Use ranged attacks where possible.
Defense your friend. The higher your defense, the less chance you will get hit. The one giant caveat is monsters with ITD attacks. I don't know which monsters have them but I am told they exist. Defense is based on a lot of factors. Dexterity is the only stat that effects it. My gut feeling, however, is that Dex, in the long run, will be less significant than raw def on items. There is ALWAYS a 5% chance you will be hit.
Str is important as it limits your choice of armors (and weapons). In practical terms, however, what are your real chances of finding an item that requires the mythical 253 Str?
Elsewhere I talk about the clvl/mlvl issue. Level plays a very important role in your chance to hit/be hit. I'm downplaying this intentionally as I hate exp grinding. There is nothing to do except understand that as the difference between the monster's levels and your level increases the more def/atk you have to have to try and compensate.
Blocking is the next option. Blocking, as far as I can tell, happens only after you fail to dodge. Chance to block is based on dex scaled down by level. To keep your total chance to block at the values listed on your shield it looks like you need to put two points in dex every level. Apparently your chance to block is capped at 75%.
Special note for assassins: weapon block appears to be treated separately from normal blocking.
There are some skills that can keep you from being hit. If you have them in your tree you are probably aware of it.
Finally, be faster than the enemy. If you can kill or stun them before they hit you, all the better.
Locking gets special mention here. Stun locks, block locks, etc. These are bad bad situations. Faster hit recovery and faster block deserve serious consideration. Being locked can mean being surrounded and being surrounded means getting hit.
1b. Don't take damage.
DR items are your friend. Most monsters don't hit very hard (relatively speaking) so a little DR goes a long way. The sames goes for MDR.
1c. Take damage... selectively
Having life is critical. You will eventually reach a point on the cth curve where you can no longer attain a high enough defense to not be hit. And blocking will fail you sooner or later. Make sure you can take the hit when it comes.
(I think it would be an interesting experiment to make life/vit the number one priority and make due everywhere else. I wonder if it's possible to have enough life to survive one of any possible attack? Somehow I doubt it.)
Know the monsters. Some monsters have weak melee attacks that are situational. Take advantage of this where possible.
1d/2. Kill Things.
Neat transition there, if I do say so myself. In a way killing things is simply another way to not die (LE/Aura monsters excluded).
This is a little more complex. In most situations you want maximum burst damage. A slow weapon with high damage will beat a fast weapon with marginally better dps thanks to one hit kills. Long fights (any situation in which there is zero chance of a one hit kill) are all about dps. The longer the fight, the more important dps becomes.
In practical terms, there seems to be little difference in burst damage between weapons with similar dps. This is not always true, however.
Max and min damage are not what matters. Average damage is everything. Statistically speaking, your modal hit should be for around the average damage.
Figuring out how fast you swing in d2 is annoying at best. Every class has a set of animations for swinging a given type of weapon. Those animations have varying numbers of frames from class to class. As far as I understand it, IAS means some of those frames will be dropped. Remember that when calculating the benefit of an IAS piece only the integer part of the new frame count matters (d2 can't display 7/64 of a frame). Every class has a minimum number of frames (max speed) for swinging a given type of weapon (presumably frames Blizz deems essential for preserving the look they want).
In general, it seems that upgrading to the next weapon in the family you are using, when it becomes available, is a good baseline. Somewhat obsolete information on the Lurker's Lounge seems to indicate a general upward trend in dps. Affixes will change this, however, so don't upgrade blindly.
Strength plays a small direct role in dps. Indirectly (because it limits your choice of weapons) it plays a HUGE role. I have trouble weighting its value, to be honest. I think, due to your low chance of finding the uber-req items, that other factors outweigh str in the grand scheme of things. I do consider, though, that for non boss-fights (the bulk of time you'll spend playing, generally) there is a maximum useful damage (maybe 1.5k?). For boss fights being able to do 4k would do wonders for your survivability. Again, your mileage may vary.
Don't underestimate the value of elemental affixes on items (especially charms) that damage can really skew your dps. However, also understand the limitations *cough* global resists *cough* immunes *cough*.
3. Find Stuff
You do this so you can do 1 and 2 better. Unless you are an ebay farmer it's not more important than a distant third.
Other Stuff
Frankly, beyond a certain point (a def/lvl threshold) it's not melee types that are going to kill you. Generally, it's magic. MDR and resists help close the immense power gap between melees and casters. In my opinion, that power gap is perhaps the worst flaw in an otherwise very enjoyable game. Perhaps it makes sense from a rp standpoint. *shrugs*
Resists deserve mention in the section on not dying but I can't figure out how to work them in nicely. In a way resists are kind of a pisser in d2. They are essentially a affix slot sink. Think how many affix slots you have to use to compensate for the brutal resist penalties in nightmare and hell. Negative resists are BAD. Magic damage is potentially so bad (especially later on) that no level of life will compensate for it. You pretty much have to have resists. Nuff said.
Absorbtion is better than resists if you can get it. I think it only occurs on high level uniques, however. I've never seen it in a single player game.
Summary... sort of
I guess, in the end, the goal is to maximize your chance to stay alive for the time it takes to make everything threatening you dead. D2 presents the player with a WHOLE LOT of ways of trying to do this. It's all about balance.