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this is probably a very stupid question, but. the majority of the items that i am carrying are labeled as unidentfied, therefore I can not use them. How do I identify them so I can use them or sell if I cant use them.

Do a check through the skill section in the manual. There's a first level wizard spell described in there that will give you the info too.

You can have a seller identified for 100 gold or one of your ncp can identify for you too, if you put it in their inventory when they join your party. Spell caster in your party can identify some items. You can also buy or found a spell that can identify item for you too.( if your player can cast that spell)

The above is correct, but the easiest way is to have a high Lore skill on either your main character or any NPC you control. The more points, the better, as the result of being able to ID something or not will depend on a check. Each item will have a number that must be met by your Lore skill number in order to ID the item.

Remember, that Lore is modified by INT score so anything that increases your INT will boost your Lore (sometimes it's just enough to ID it). Potions of Lore improve your skill by a certain amount for a short time and items that improve it will help as well.

If you have a high enough Lore skill, items will automatically be ID'ed when they enter your inventory. If your skill isn't high enough upon entry, it will remain un ID'ed, even if your Lore skill is increased enough, until you "examine" the item.

This foes for NPC's as well.

Four ways:

Merchants will charge 100gp per item;

THe Wizard/Sorcerer spell Identify, but it only works in a limited fashion;

A High Lore skill will ID (There is a chart somewhere that tells how high a Lore value is needed to ID an item, based upon it's value) automatically anything in your inventory. You can up this with potions of Lore;

A bard gets bonuses to Lore; making it easier for them to ID than any other class (Grobnar actually has a use!! heh)