I've seen alot of questions lately on the subject of drop bars for mountain bikes. I think that there are alot of misconceptions out there on just what to do and how to do it, so here's a few tips. These concepts were gathered through reading material on the subject by Charlie Cunningham, an early adopter of drops for off roading, and from an excellent piece done on the subject by Don Person, better known as "Shiggy" on mtbr.com's forums.
1. Probably the biggest misconception out there has to do with the height and reach of drop bar set up. Here is something that will help clear it up for you. Always, always, always ride off road in the drops. Off road drop bars were not meant to be ridden "on the hoods" as so many roadies are doing. The reason for this is control. Off road the bumps and jarring will make riding on the hoods a dangerous proposition. Riding in the drops actually lets you relax your grip, since the bumps force the handle bar into your hands. Plus, the round cross section of the bar is far easier to hang on to than the hoods.
2. Taking #1 into consideration, it becomes clear that your off road drop bars are to be at a height where the drop section would be level with the height where your grips would be on a flat bar set up. This generally requires a high rise stem for your drop bar.
3. Also taking #1 into consuderation for reach, you may run into trouble if you are already running a very short stem, say less than a 90mm reach. Your stem choices will be limited and your reach may be compromised. It might be better to use a slightly shorter top tube on a different frame for a drop bar set up. (Or go custom)
4. Drop bars good for off road include the On One Midge bar, the Origin 8 Gary bar, and the Salsa Bell Lap.
5. Stems that have high rise that work with threadless steer tubes are available from Salsa, Dimension, and a host of custom builders.
6. Drop bars can be used with single speed drivetrains or multi geared. STI shifters work great off road even with flared bars like the Midge and Gary bar. Bar end shifters can also be used, but because of the flared drop ends, they can sometimes be damaged in crashes.
7. Brake lever tips should be easily reached from the drops. This means you will run the levers lower down on the bars than a road set up. Much lower! Mechanical disc brakes can be set up for use with drop bars if you use Avids excellent BB-7 for road levers, and there is a cheaper Tektro road disc brake as well. Currently no hydraulic disc brake set ups are available for off road drop bars.
Okay, that should help, but if there are any qustions, let me know. I'll be glad to answer in the comments section.