Items are categorised into 8 different grades. They are - damaged(there are a few kinds),
normal, socketed(also refered to as normal items though),
superior, magical, set,
rare and unique items.
you will notice the different grades have different coloured names.
Magical & Rare items:
When you are playing the game you should actually notice that some rare and
magical items don't look like the basic ones. This doesn't matter and it's normally
only a minor change such as turning red because it adds fire damage. Magicals
are good early on but they can get quite useless later. Rares can be excellent and
if you get the right mods(that's prefixes and suffixes)then they can most of the time
be defintely better than uniques.
Prefixes Suffixes
Set items:
Set items are very good if you get the complete set but some can even be good
without the complete set. When you get all the pieces of a particular set then it will
give you some mods such as adding poison damage or something but this is only
done when you have all the pieces in the set and your are wearing them all.
Check out the Sets here.
Unique items:
Uniques can be either excellent or very useless. Examples are things such as
Twitchthroe which is a very good armor as it has two impossible mods for an armor.
And then you get Hawkmail which is like totally S H I T. Remember though, there is
only one of each type of Unique items. This means there aren't two kinds of Unique
Broad swords. Also if someone in the game already has that item then you cannot
get it. You will have to either start a new game or join another one.
Check out the Unique Items here.