If you're partied (or not but do enough damage to meet the threshold) then you qualify for drops which are distributed by the game (can't roll on drops from mobs -- they just happen). For exp, again you can be partied or not, and you will get an amount relative to the highest level player that dealt damage to the enemy (this may be in parties only -- unsure). The ideal setup would be both of you being the same level or very nearly. In FATES (and even more so in dungeons) you'll be level synced such that everyone more or less gets the same amount of exp (and is at the same level give or take a few).