World of Warcraft Official Strategy Guide Excerpt #7
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When beasts are killed in the wild, Skinners swoop in to take their hides and any leather from their corpses. You'll need a Skinning Knife in your pack to do this. You must wait for the person who currently has looting rights to loot the animal. Once all the items are taken off the body, right-click it to begin skinning.
If you're successful, a loot window opens showing what you've managed to take off the body. The types of leather and hides depends on the level of the animal combined with a bit of randomness. Animals bordering the next tier may have a random Medium Leather hidden among the Light Leathers. Skinning higher level beasts offers better leather and hides.
