Without giving any spoilers.
To see if an item has a special power, try equipping it (E key). If that's not possible, try using it without equipping (U key).
Some items have both of the above. They can be equipped to give some bonus, and while equipped you can use them for additional bonus.
If you can neither equip it nor use it then it has no value (except if it's needed to complete a quest, in which case it will not be dropped by a random monster), so you can sell it for money.
Unfortunately, there is no way in MM1 like in MM2 to identify items at a blacksmith. So the only way of finding out if an item does anything is by trial and error (or using the Cluebook, which I ended up doing since trial and error proved to be too tiresome).
Finally some items are cursed (I think weapons/armor and shield only). While equipped, they give no bonus and cannot be unequipped except by spell or in a temple.
As for amber gem... if you try out the above, you will soon find out the answer.
Post edited June 07, 2012 by ZFR