I've definitely heard of this. I'm from the Northeast. We tend to give cash as the gift at the wedding and registry stuff at the showers.
I do consider the "price per plate" to some extent. If someone invited me to a wedding and it was $150 a plate. I'd feel funny giving $50. But, that doesn't mean I would give $150 or more. I would give what I could afford comfortable. But, if it's more expensive and I can afford a few extra dollars. I'll give a little more, rather then less. So, if I normal give $100, I might give $ 120 (if the plate is $150 each) .
I do adjust the price according to how well I know the couple. Although, when I attend a wedding, I generally know the couple well (or I would not accept the invite). So, I give generously.
A good rule of thumb is about $100 a plate. Most wedding in my area are anywhere between $80-$120 a plate. So, I feel $100 is good amount. If I know the couple well, I want to give them a large gift. For a wedding, I feel $100 is a standard amount.
If it was someone I didn't know that well, then $70-75.
As for how you know. In general, you can tell how much a plate costs buy where the reception site is held. Also, you can usually tell by the type of people hosting the reception. If you're friend is a doctor and the reception is being held at Ballroom of a super fancy hotel, you know the plate is going to be at least $100 bucks.
Also, I usually google the reception site before attending the wedding. That way, I know where it is (get directions) Also, I can tell how formal the wedding will be and therefore I can decide what to wear.