The problem is that there are two ways of accessing your Game Menu. First of all you can click the right mouse button and select inventory and from here you can examine items and spells, read books and combine items, etc., but you can't use an inventory item in the game world. However, if you click on an object in the game world the Game Menu pops up automatically, so you have a choice to take the item, use another item from your inventory on it, or use a spell on it. Make the wrong choice and it just throws you, unceremoniously, back to the game screen to try again. To preserve your sanity it's crucial to keep the two modes distinct in your mind.

The bugs! I just don't know where to start here because everyone seems to have a different experience even using the patch. Forewarned, I installed the patch before I started, but it made the game unplayable so I had to reinstall without it and start again. I did then find several glitches later in the game, but I managed to scrape through by replaying particular sections in another order. Ultimately the bugs played havoc with the game's continuity and, in all fairness, they probably contributed to my problems in following the story.