Treasure Hunter is a talent that increases the amount of items dropped by monsters. In order to get this talent, the player must first select the Alert (+1 Pe) and Miser (finds more gold) talents largely considered being of rather dubious value by themselves.
The talent works in the following way: each time a monster does not drop an item, it gives a 12.5% chance that it will drop one anyway. This usually translates to an increased drop chance of 50%, or more, or less, depending on how likely it was that the monster drops an item to begin with, which is not clear. If for instance, a monster had a 5% chance to drop an item, Treasure Hunter would add an additional 14.25% (15% of 95% "no drop") for a total of 19.25% drop chance, which is almost quadruple; if a monster had a 50% drop chance, this would increase to 57.5%. The actual values are usually in between somewhere, hence the common misconception that the talent "doubles" your chance to get an item dropped (at most, it "roughly doubles" it, on average, depending on the actual drop rate of the monsters encountered). Note that it is opinion that certain special drop types, notably drops of corpses or monster specific weapons (e.g. short bows on kobolds, dragon loot) are not affected by this talent.
Suffice it to say that players with the Treasure Hunter talent will find a significant amount of additional items given enough time, which is more or less equal to number of kills. There is no increase in item quality, only amount.
The value of this talent is hotly debated. See Treasure Hunter Debate for details. The short version:
Because of the significant increase in the number of items produced, many players feel that this is one of the best, if not the best, talent in the game. Other players contend that since Alert is a starting talent and Miser is hardly valuable at all, pursuing this talent instead of others can adversely effect Early-Game Survival for what actually translates to very little benefit in practice, especially during that crucial phase of the game.