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http://ds.heavengames.com/cgi-bin/forums/display.cgi?action=ct&f=29%2C1978%2C90%2Call
"Legendary is the best enchantable items, they open all the available slots on an item to use for reagents. I wouldn't bother with anything less. I'm not sure about the actual mechanics in the game for finding magical items. But say if you have a 2% chance to drop a set item normally, my guess is that 100% magic find will boost to 4%, and likewise 700% will only boost to 14%. So your chances of getting good drops do get better, but still not awesome. I really didn't notice a difference till I had my magic find % way up. Someone that can read code would probably know the exact numbers and how they interact. I believe that drops are also contigant on level also. typically you won't get too many drops that are outside 5 levels in either direction of your main characters level."
Not sure if the above link is referring to Dungeon Siege 2 mechanics. If it is, then seems rather pointless to boost magic find chance.
It appears to be. Atleast, it's organized under the DS2 group of forum discussions.