Basically this game is played entirely with the mouse (there are a few keyboard shortcuts though it's been a while so I don't really remember... I think it's ALT to toggle combat mode, 'I' for inventory...)

Right click and hold to move in the direction of the green arrow
Left click and drag to move things around (you can move just about anything in the world)
Double left click to interact with things/people
Double left click in combat mode (red arrow) to attack something
Single left click for a description of things (again, just about anything in the world)

Inventory/equipment works the same - left click and drag things, double click to open backpack/bags. Just be careful when putting things in your backpack that you remember where you put important things - it's easy to bury and lose things in there, especially if they're small.

Also, you are limited by weight AND capacity in your backpack so don't pick up everything (unless you plan to start a collection of Britannian spoons).

Basically once you know that it's pretty straightforward - the only other thing that took me a while to figure out (I used to play this as a 5 year old) is the levelling system - when you level up you don't automatically improve any skills/attributes, you get Training Points which you then have to spend with a trainer to improve. Trainers can be found in a few of the towns around Britannia.
You can check your XP and Training Points on your stat screen (click on the heart on your inventory screen)

One other thing you might not think of is that your party needs to eat - make sure you always carry food with you.

Hope that helps - it really is an amazing game and definitely worth the time to get the hang of.

Read the manual as well - particularly if you want to start using magic as this is a bit more complicated.

Very cool. Thanks for the help, I'm looking forward to getting into this (although that's tempered by the fear that it's going to consume an unhealthy amount of my time).

The hotkeys that you're likely to use the most are:

I - Open inventory. (Avatar first; subsequent presses open each party member's in turn.)
Z - Open stats panel (Avatar first, as with inventory.)
B - open the Avatar's spellbook (if he has one).
M - Show Map. (Includes a crosshairs showing your location if you have a sextant and are in an open area.)

C - Toggle combat on/off.

T - Target reticule (Pauses the game; whatever you click with the reticule is "used" as per a double left click.)

With Serpent Isle, you'll also make heavy use of...

F - Feed target. (Pauses and gives you a targeting reticule; selected party member will consume food from party inventory until full.)
K - Keyring (Pauses and gives you a targeting reticule; any door/chest/etc for which the appropriate key is on the keyring will be unlocked.)

Don't forget that Esc will close all menus you have open at once

It's been ages since I last played U7.

One more thing, the farther the green arrow is to the character the faster he will walk/run