There are two ways to access your inventory. Press the I key to bring up the inventory interface that lets you equip weapons, armor, and off-hand items like shields and artifacts. You can then navigate between your backpack, belt pouch, and extra bags with keys F5-F8. Press F9 to bring up a separate window that displays all of the items in all of your bags at once. Bags are expandable via certain upgrades, and you can expand your inventory even more by opening an account with a Xunlai Storage Agent. If you have the Factions installment, you may upgrade your Xunlai storage account to hold even more materials.
Usefulness and rarity determines an item's worth. Common items—including weapons, armor, and most anything else—will have names in white lettering. Uncommon items with innate magical power have names written in light blue, while the names of rare items are displayed in purple text. The rarest and most valuable tools of the trade have names written literally in gold. Unique items belonging to a single boss will sometimes drop when that boss dies; these items' names are shown in green (boss items are not necessarily better than gold or purple items).
If you're looking to sell items, be sure to hit the Trade chat channel before you go straight to the Merchant or Trader. You will almost always get a better price from your fellow gamers if you're a reasonable negotiator.
Every profession has a unique type of weapon all its own (though any profession can use any weapon if necessary), but only the character type that meets a weapon's requirements will get the most out of it. For example, a Warrior with high Swordsmanship skill would want to use a sword that required a certain level of Swordsmanship attribute points. That same Warrior, however, would not be able to get the most out of a bow that required 8 Marksmanship—but a Ranger certainly would find that bow effective. When you find or buy a weapon that you intend to use for a while, be sure to hit the Weaponsmith in town. This type of NPC can customize your weapon so that it does more damage, but no other character will be able to use it (meaning you likely won't find a buyer).
Your primary profession determines what type of armor you wear—no matter how much you want your Ranger/Necromancer to dress up in shiny black leather, you're always going to look like a Ranger. Pieces of armor, unlike weapons, are customized by default when you buy them. You can purchase armor from an armor crafter NPC if you have the components (bought from a Materials Trader, for example) and gold to meet the crafter's price. You might also find collector NPCs that offer you even better armor in exchange for trophies you collect from fallen enemies—this armor is often your best option if it's available. Enemies do not drop wearable armor when killed, although they may drop salvageable pieces.
Merchants sell two item types that are crucial for getting the most out of the other items in your inventory: Identification Kits and Salvage Kits. Identification Kits come in two varieties: Normal and Superior. Only Expert or Superior Salvage Kits yield Runes, weapon upgrades, or rare materials from salvaging items. Normal Salvage Kits will return basic crafting materials. The only difference between the Normal and Superior Identification Kits is the number of times that you can use them. When you find a magic item of any kind, the word "unidentified" will appear beneath its name in your inventory. Use Identification Kits to discover the true identity of an item and its most effective use. Salvage Kits are divided into normal, expert, and superior classification. Normal Salvage Kits can break down most anything in your inventory into materials like wood or cloth that are useful for crafting. Expert and Superior Salvage Kits let you unlock Runes and upgrades from valuable magic items, or give you rare crafting materials such as fur squares. You can only unlock a Rune or upgrade after you have identified the magic item. If you salvage an item before identifying it, you may get a Rune or upgrade which says "unidentified" beneath it. You can still use an Identification Kit on your unidentified salvage result. To use any kind of kit, simply double click on it and then click once on the item you wish to identify or salvage.
Salvage items are the remains of enemy armor. You can't use these items yourself, but you can use a normal Salvage Kit to break them down into useable materials for crafting. Some rare salvage items also contain Runes or weapon upgrades, so be sure to use an Expert Salvage Kit on those items after identifying them.
Crafting materials come in two flavors: common and rare. Crafters such as Armorers and Weaponsmiths use items like tanned hide squares, shells, wood planks and steel ingots to create weapons and armor, among other items. You can sometimes find materials dropped by enemies, and you can also get them by salvaging other items. When you need a specific crafting material—especially something rare—your best bet is to hit the Materials Trader NPC and bring along some gold. By the same token, you can unload materials you don't expect to use at the Materials Trader and get some of that hard-earned gold back.
Runes are arcane symbols that alter the very magical nature of a piece of armor. Certain uncommon or rare found items—especially magical salvage that appears to have no other use—contain Runes that you can retrieve with an Expert or Superior Salvage Kit. You will be notified when you identify an item that contains a Rune, and if it's not one you intend to use it might fetch some gold from the Rune Trader in town. Your character can only use Runes tied to your primary profession—your Warrior/Necromancer cannot use the Necromancer Minor Rune of Curses, but can use the Warrior Rune of Minor Swordsmanship. Note that the effects of Runes do not stack—if that same Warrior/Necromancer is already using Ringmail Gauntlets of Minor Swordsmanship, using that Rune to create a Gladiator's Helm of Minor Swordsmanship will give you no benefit.
Upgrade components are similar to Runes and have similar effects, except that they apply to weapons, whereas Runes apply to armor. Any character profession can use upgrades, though again, the weapon type should sync up with your attributes if you want to get the most use out of it.
Scrolls are special items that temporarily augment the amount of experience you and your party receive. They also come in differing levels of rarity, and their effects will endure even upon your character's death. Rare Scrolls can be purchased from a Rare Scroll trader, and are usually quite expensive.
So you've been adventuring for a few levels, and your bags are packed with carapaces, jawbones, lodestones, and other trophies of your battles. If you need gold, you can sell trophies to the Merchant. You might hold on to those items if you have the room in your inventory and don't need instant cash. Collector NPCs will take those pieces of fallen foes and turn them into magic items that are of much more use to you. Some Collectors offer armor that's often better than what you can get from a crafter.
Quest items take up slots in your inventory like any other item, but cannot be sold to a Merchant. Sometimes you might receive more quest items than you need to satisfy a given quest objective, however, and you can sell such items on the "open market" of the trade channel. In general, you have no more need for the item once you've finished the quest.
Bundle items are special objects in the game world that don't fit into your backpack or bag—your character must carry them in both hands, preventing you from using melee attack skills or getting the Health and Energy benefits of any equipped items until the bundle item is set down. Bundle items are always associated with quest or mission objectives, and represent items that you must personally deliver somewhere else. Using instant map travel while carrying a bundle item will only rob you of the bundle item in question. Some special bundle items give you a magical bonus when you drop them (or while you carry them). In a group, bundle items are usually carried by professions that use magic, because carrying one does not prevent you from casting Spells, Enchantments, or other magical skills.
Loot and Treasure
As you defeat enemies, items or gold will usually fall next to the corpse of the fallen. Gold can be picked up by any player character in the group, and is divided among all party members (including henchmen). You may only pick up loot items that have been reserved for you at random (if you are playing completely solo you will always be that random player).
Keys come in many varieties, with different names corresponding to the types of chests which they open. For example, Shiverpeak Keys open Shiverpeak Chests. You may purchase keys from Merchants in the appropriate areas, although sometimes keys drop as loot from monsters.