Weapons, armor/cloth, hat, amulet, ring, pants, gloves and boots are items you can equip your character with. They must be on your character to be active - equipment in your bags or warehouse is inactive. When the durability of your equipped items is reduced to [color:red]0[/color] then it also becomes inactive, so remember to repair.
Your equipped items enhances your character abilities.
To change equipment open your bag or warehouse, and your character screen - then drag the desired item to the character screen. If you already have the equipment type on, then its automatically switched with the one you dragged over.
You can also double click on the item from the bag (not warehouse) to change equipment, but beware of doing this when you have a vendor window open as it will result you selling the item instead - and there is no UNDO.