I stopped the bank robbers with Doc in shrouded hills, and he gave me a sword that outlines in blue whenever you select it. Is this a magickal weapon? If so, is there anything you can do to enhance it's power? Or any magical weapon for that matter....
Any item with blue writing is magickal. Any item with orange writing is hexed i.e. bad for the most part. You cannot change the stats on those items. You have to identify magickal items by either talking to wise women around the various towns (Shrouded Hills, Ashbury, Tarant and Caladon at least have them), buy Scrolls of Divination (expensive!) or master the divination college yourself (level 5 spell, identifies magickal items).
Bullshit, I've seen a whole lotta oranges items that aren't hexed... hexed is just a weak group of cursed... kind of like magickal mystic and arcane items. And there are unique cursed items too. Now the way to identify the items is to find some kinda 'wise woman'... strange group. They're in all of the big cities, somewhere outside. There's always a road/tracks leading to them though. You pay her 100 in cash and she ID's the items. It's a good idea not to weild unidentified items, or save before equiping one... Another good idea is to read what item does after identification. Watch for that word 'permemantly' which so many miss. Last tip... alot of people found that sword "blackstone blade" in old tarant sewers and tehn were very disappointed with their stats... It's a good weapon, but it has -4 DEX permanently.