In addition to the standard weapons and armor in Arena, there are also magic items that can be equipped to improve your character's abilities or used to create a specific magical effect. All weapons and plate armor can be enchanted. Leather and chain armor cannot be enchanted, however, so unless you are a Warrior, Ranger, or Knight, magic armor is not something you can use.
Magic items can be purchased from the Mages Guild. Not every Guild will offer the item you want, though, so you may have to do some traveling to find something that suits you. You can also find magic items as treasure. If you do, they will be identified in your equipment list in blue. To find out what they do, you can either equip and use them or you can take them to a Mages Guild to be identified. Note, however, that not every blue item is magical.
Use Magic Item icon
Bracelets, belts, torcs, and amulets can be equipped by any class. They cannot be "used", but rather have a constant effect when worn. When you equip them, they either improve your armor rating or they increase an attribute.
Marks, crystals, bracers, and rings can also be used by anyone, and produce a particular magical effect when used. To use a magic item, click the Use Magic Item icon or press the U key, then select the item you want to use from the list in the lower right-hand corner. For an item with a targeted or ranged spell, follow the onscreen prompt to use it.