I believe I have a decent understanding of how Magic Find works. I didn't spend a lot of time analyzing all the intricacies but at it's most basic level (and correct me if I'm wrong), MF works by increasing the chances of Magic, Rare, Set and Legendary items dropping. I don't know the actual numbers but if an item that drops has, say, a 0.01% chance to be Legendary at 0% MF, the chance will increase to 0.03% with 300% MF. However...
Here's a nugget of wisdom for you. It might shock you but... Magic Find is actually useless. It doesn't do anything. Nada. Zilch. You're better off without it.
I kid. Somewhat. Anectodal evidence suggests that MF doesn't have a big effect on the quality of items that drop. While I realize this isn't really true, because MF does in fact increase your chances of getting higher quality items (as shown above), my personal experience is whacky enough that it makes me think otherwise. Now mind you, this is just a personal impression and not a statement of fact and I'm sure it's wrong. Nevertheless...
I grinded Inferno Act 2 with my Monk up to Paragon Level 4. I carry a set of MF gear with me that I swap right before killing elite bosses. That gear, along with 5 Nephalem Valor stacks gives me almost 300% MF. Not bad, right? While I do seem to get more yellow items, I have never seen a Legendary on the Monk, and he's my most-played character.
Recently my Wizard has become my main character. She's Paragon Level 6 now, also in Act 2. She has already found 2 legendary items ("new generation") after patch 1.0.4 was released. Her MF for the latter of the two? 87% (with 5 NV stacks). She doesn't even have a special MF set. It's true that these 2 were pretty crappy (see below) but still, they're LIGINDUHRIES! And I managed so sell them for a few $.
Even more surprising is the fact that all the other legendaries were found by my Barb, while he had close to 0 MF! He even got 3 of them (!!!) while playing with my buddy, in the space of an hour. That's some crazy shit man!
My point is that I am aware that Magic Find helps. There's no reason to doubt the math behind this. But I'm done agonizing over how much MF I have. I just don't care anymore. The randomness of drops makes it such that you may never see a Legendary in over 100 hours of playing, with very high MF, or you may get a shitload of them with much less time played and < 10% MF. And you know what? I prefer it this way. I'm sick and tired of swapping 8 pieces of gear every time I prepare to give an elite the death blow. Paragon Level 100 can't come too soon.