Gear can actually be a very telling tool.
Gear for dps, first and foremost tells you his/her dps potential, even the most skilled of players can dps so much in not very good gear.
The more important thing IMHO is that gear tells you what he has done. See that non-Gunship Heroic item? Usually tells a lot.
But ultimately, gear and achievements can only go so far, there are some who have both gear and achieves but in reality were carried through (the bad boomkin and spriest from our PUG ICC 10 today springs to mind, they can show their 2/3 completed Heroic Plaguewing achieve to get into future PUGs now ><)
We just have to trust and see, or look up his armory, that 264 loaded person, after all, could be way over/below hit cap and/or expertise cap, seen many a case like that and it makes me wonder does the average PUG actually bother looking at the actual stats on the item, rather than gearscore, in the first place.
Whenever I judge someone based on gear, I always do so with his dps. If he is walking in blues but pulling 3k dps the person is obviously good so I let it slide, I always let lower-than-expected dps the benefit of the doubt if his gear is not very good. But of course there will be a limit I can tolerate. If I see a 245-251 geared person pulling 4k or so with raid buffs and the 25% ICC buff in a dps race, obviously I am going to question how good he is.