Items are grouped into 3 main categories, weapon, armor, and other. The buttons at the top are used to select this. Each main group is further divided into subgroups, as can be seen in the picture. To choose an item, simply find its category, select it from the list, and click Done.
When creating a potion (Other -> Potion), a drop-down list for setting the power of the potion is displayed.
When creating a scroll (Other -> Misc -> Scroll), 5 text fields will be displayed below the item list. It is here that the text may be entered. Be careful not to use too many words on a single line, as they could end up not fitting onto the scroll picture in the game.
When creating a chest (Other -> Chest), a panel will be displayed below the item list. Items can be added to the chest or changed by clicking the Add/Edit Item button, which brings up another Item Wizard. Items can be removed from the chest by selecting it from the list, then clicking the Remove Item button. Unselect an item by clicking it again, or clicking in the white space of the list (if there is any).
Most predefined items can be modified by hitting the "Edit Predefined" button after finding and selecting the desired item. If an item cannot be edited (currently, some special items like chests and potions cannot), the button will not be displayed. Hitting the button brings up the Item Creator. Once the item creator is closed, click done to add the edited version of the item. Clicking the item in the list again will restore it to its default state. Note that the next time you use the item wizard (unless you are using it to modify an existing item), the edited version will be used. This allows multiple edited items to be added in a row. Of course, if you change the name of a predefined item, it becomes a custom item, described next.