I found this video about what motivates people to be very refreshing.  Basically, if the tasks that people are working on require more than a basic physical action, money rewards don't motivate, but rather demotivate people.  What really motivates others to perform well at conceptual tasks are three things:  autonomy, self mastery, and purpose.  What I find is that Agile practices tend to foster or work within these motivations.  

For example, user stories really help to zero in on the purpose for a given feature request.  "As a [actor], I can [do something], so that I can [accomplish a goal]."  Developers really get a sense for why they are building a piece of functionality rather than just focusing on building a method, etc.  And the prioritization of these stories helps to clarify what is truly important within a sprint.

As well, agile practices promote mastery by emphasizing continual improvement.  Teams are encouraged to use the processes that work for an individual team rather than trying to create a process that will work for an entire organization.  Other principles such as refactoring and unit testing also suggest an intense focus on continually improving the code base.

And finally, the scrum meeting and agile planning in general focus on the team working together on deciding the priorities rather than having a central authority such as a PM do that.  Individuals make themselves accountable to the team by explaining what they accomplished yesterday and what they plan to accomplish for the current day.  This creates a sense of autonomy in those performing the work.

I would be interested to hear your thoughts on the video as well as whether or not you agree that agile practices help to foster these motivations.