I don't know if I'm missing something but I can't seem to figure out how to find the solution to clues that lead you to treasure. I don't expect it to be easy but I'm clueless about what I'm supposed to do after I figure it out.
For example. The riddle I'm currently stuck on is:
One island is the Island of Cats; the other Charles once lay his head. Begin at one, leave the other to the left, find a small isle and of treasure you will not be bereft.
It seems pretty straightforward but I've been everywhere to the left of those two islands and only see Florida Keys. If the treasure is supposed to be on that island I don't know what I'm supposed to do to get it. I tried right-clicking, checking to see if there was an NPC in the inn but nothing comes up. Is the island supposed to be invisible? I just need to know how this treasure hunting thing works.

I don't know for sure, as I've never got this one yet, but have you tried looking at the small islands to the NW of Cat Island? I know, it's not really to the "left", but they qualify for "small island".

Thanks for the tip. It was actually one island in the SE.but your suggestion gave me the right idea. At least. now I know all I have to do is go to the area where the treasure is hidden. I thought you had to click on something. Thanks again.

You're welcome.
You know what's funny? I've been given this same puzzle JUST RIGHT NOW. As if it was waiting for me to encounter it on this board...

Isn't that something? At least you know where to go now. Also, I just realized, if you save before collecting the treasure then get it, if you don't like it you can reload and you'll get another treasure. For that one I got either cannons, crew mates or 2 experience points. I was hoping for money though.

It's like that in Port Royale 2 as well; however, in that game, it is mostly goods, so it's more profitable there.
But, who knows, maybe Port Royale's rewards get better with your level.

I have Port Royale 2 in my wishlist but wanted to play 1 first. I really hope the rewards for treasure hunting are better as you go along. The most I can do is sell the excess cannons. I can't afford to pay for more sailors.

Riddle Solutions from http://www.angelfire.com/games5/aesir05/riddles.htm
I'm reposting the location images here incase the original source is ever lost and so you don't have to see answers to riddles you want to solve yourself.
1. Cat Island.
One is the Island of Cats.
On the other Isle Charles once lay his head.
Begin at one, leve the other to the left. Find a small isle, and of the treasure you will not be bereft.
2. East Bay.
We came from Havana, but luck was not on our side.
We ran around in circles looking for gold in a land great and wide.
North of Trinidad, somebody said. We searched and searched, and nearly went mad.
Move slightly east, and you will see. A bay you will find, now leave me be.
3. Heart Town.
You need to go to Caracas.
The town is located by the heart, not far away.
Halfway down, the treasure is hidden.
4. Islands Two.
Two towns are important, not one and not three.
Belize was the first one I've seen, the King's harbor in the second must have been.
From one to the other i draw a line, middle to north, a journey short and fine.
Up north you'll find the islands, two. Miss the first, the second is true. Move round it quite slowly and the treasure is for you.
5. Jesus Body.
Let your journey begin at Jesus' body.
Draw a circle where the journey begins, two days it will be. From the town you will reach, sail on towards the morning sun out at sea.
From the town you shall reach, sail on due south for a few days. Search the coast there,
The boats location in the images mark the treasure locations so only open if you don't want to solve the riddle yourself.

Riddle solutions continued.
(guest post as forums dont allow double posting??? (it overwrites onrignal), and 5 image limit per post.)

Continued...
6. Other Side.
The journey starts where the little keys are found.
Travel with the easterly wind for a day, brave all dangers, come what may.
The end of the journey is the destination town. On the other side, the treasure can be found.
7. Pirate Frown.
From Port Royale to Antigua you must go.
Halfway through the journey visit the town, just like the pirate, never a frown.
Travel due south with a speed of ten knots, avoid the treasure as you go.
8. String Pearls.
From Roatan, sail towards the gold and into the sun, but don't leave to late, that would be no fun.
You will reach the string of pearls, but it's still far to go.
Count down to the fourth link, on the back the winning song will play.
9. Tuck Corner.
Begin your search in the little town at the north-westerly foot of the old pyramid.
Draw a circle where the journey begins. Two days hence from there you will reach an island.
From the island, sail west and search the coast. The hideout is a fair distance from Port Royale, but it lies more to the south, tucked away in the corner.

10. Two Palms.
The flower island hides it well.
From the keys int he sea travel north.
Two palm trees mark the spot, search around the left.

As before: The boats location in the images mark the treasure locations so only open if you don't want to solve the riddle yourself.
Hopefully this helps. And hopefully it is easier to find as the original source page required a very exact word search to find.