What is the deal with flying with hand guns in the luggage?

I think you must declare them...
When do you declare them... at the counter or way before the flight?
Where does the ammo go?
In the same suit case as the handgun?
Another suitcase?

What if some one steals the handgun [in route]?

What about picking up you luggage at the other end... Say Miami?
Has anyone had any bad encounters with this issue out of DIA?
Good encounters?

Thanks for any info..