Red - fully restores your health unless you are completely healthy, in which case your hit points may be reduced drastically.
Yellow - restores 10-12 hit points.
Orange - increases mana by 10-12 points.
Green - a green potion is a classic, as it always was poison. In Ultima 8, however, there isn't the poisoning like in previous Ultimas where you lose hit points continuously until cured. Here, you lose 10-12 hit points once when you drink the green potion.
Blue - puts you to sleep for a few seconds. However, you do not sleep long enough to restore health or mana, as you would when sleeping in a bed or bedroll.
Purple - makes you invulnerable for 60-90 seconds.
Black - makes you invisible for 60-90 seconds.
Axe
Dagger
Hammer
Mace
Sabre
Scimitar
Sword
Bonecrusher
Deceiver
Scimitar of Khumash-Gor
Korghin's Fang
Blade of Striking
Protector
Flame Sting
Slayer
Flask of oil - there are two types of oil flask. One looks like a bottle and the other is a grey pot. Either way, these are molotov cocktails - a container of oil with a paper coming out of the neck which is lit to make the oil explode. The grey pot kind looks like the homemade grenades you could make in The Savage Empire, and more powerful than the bottle type. The bottle type does 5-20 damage, while the pot type does 20-32 damage.
Fire gem - this is an explosive gem, unleashing an explosion of what looks like lava shortly after being activated, and does 5-20 damage.
Chaos gems are not explosive, but instead are containers of explosives. When activated, a chaos gem will throw out three or four fire gems, readily activated, which in turn explode shortly.
Death disks are explosive disks that can be thrown by targeting it at something, and do 5-20 damage.
Magic Helm
Magic Armour (Silver)
Magic Armour (Orange)
Magic Gauntlets
Magic Leggings
Daemon Shield
A keyring is handy for reducing the clutter and weight involved with carrying many keys. A keyring can be used directly on a door (using the 'K' hotkey in the 
Zealan Ceremonial Shield is a special shield made by the Zealans to speak with their gods. Putting this shield on an altar will allow you to speak to the Zealan gods. There are only two in existence, and bear the symbols of the major three gods (one is at the Zealan Shrine and the other is at Mythran's), but some 
Blue vial is an object which appears to have no particular use. See 
Recall Item is in Mythran's possession, and he gives it to you along with a healing potion. Thanks to the Recall Item, you can teleport instantly to any activated Recall Pad throughout Pagan. However, you must first activate these Recall Pads by going near them, before you can actually teleport to them. The Recall Item does not seem to work in Daemon's Crag, the Obsidian Fortress and all the elemental Planes in the unpatched version, while the patch seems to allow its use anywhere but in the Obsidian Fortress.
Skull of Quakes is in a chest at the upper level of the Zealan Shrine, and is placed in a pulsating red hole in the Upper Catacombs to make a quake that destroys some nearby pillars, revealing the way to a Recall Pad. The Skull of Quakes is also mentioned in a 
Gem of Protection or, as it is alternatively labelled in the patched version, blue field passage gem, is in a chest beyond the blue field maze, in the Hall of the Mountain King. This allows its bearer to pass through the blue force fields unharmed, allowing you to avoid making your way back through the maze but rather allows you to just run back.
Ceremonial Dagger is hidden away by Mordea in a chest in the closet by her bedroom, and Aramina has the key to both the closet door and the chest. When returned to Vividos, this dagger is used in the Ceremony of Eternity, in which he kills Lothian, as has been done from one Necromancer to the next.
Morphing object is a magical item which continuously changes shape between cube, sphere and tetrahedron, and labelled differently during each change. Located within Mythran's abode, this apparently is an easter egg for Electronic Arts' old logo, which I think used to be that of a cube, sphere and tetrahedron. Notice that the Avatar says "I have not the strength, nor the wisdom to master such power... ...But one day I shall!" whilst kneeling, to the morphing object when you double click it. They made the Avatar kneel to EA! A similar easter egg was in Ultima 7, where the Guardian's generators were a cube, sphere and tetrahedron.
Mythran's scroll of dispelling magical portals is a unique scroll, in that it never runs out of charges and is unique as well as essential. It is needed for revealing Bentic's Journal, and opening the doors to Khumash-Gor's tomb, only to mention the essential events, as it is also needed, among other things, to reveal the door to the Protector.
Key of the Caretaker is given to the Apprentice by the Necromancer, and is an essential tool in Necromantic spellcasting. The Key of the Caretaker is used on a bag in which are the Necromantic reagents, and like this Necromantic spells are made. Thus the Key of the Caretaker is not a physical key but a spiritual and magical key.
Key of the Scion is given to the Apprentice once he has met Lithos, and the Apprentice becomes the Scion - he who will succeed the Necromancer when the time comes. The Key of the Scion is much more powerful than the Key of the Caretaker, and in fact it has many uses. It is also a physical Key as it can open the doors leading to the location of the other elemental titans and the Zealan Shrine, as well as it is the tool used by Scions and Necromancers to inter or bury the dead.
Key of the Necromancer is in possession only to the Necromancer, and in fact you never get to have this Key in the game. I know of its existence because it is in the usecode file.
Obelisk Tip came into possession of Khumash-Gor apparently, as it is found in his tomb. This is the blackrock fragment corresponding to the Titan of Ether, and is used in yourself at the end to charge it.
Tongue of Flame belongs to the Master Sorcerer, and is used by him to control Pyros in captivity. The Master Sorcerer must call upon the help of a First Acolyte and three other Acolytes to help contain Pyros at the Great Pentagram, otherwise he can break free. The Tongue of Flame passes down from one Master Sorcerer to the next when somebody kills the Master Sorcerer and takes his place.
Tear of the Seas was fished out by Devon some time ago, and he keeps it in a chest in his study, which is in the southwest corner of the Tempest's Palace. In the times of which the history books speak, Kalen had used this fragment to contain Hydros and imprison her at Carthax Lake, where he nearly killed her before she offered to give her Tempestry powers to him and his bloodline.
Breath of Air (called "Breath of Wind" in the patched version) sits on a pedestal held on a rock near Stratos herself. Hidden to common sight, this fragment must be restored to sight and retrieved using an Aerial Servant before one can get his hands on it. Taking it breaks Stratos' link with the healers, so Stellos will die and healing spells will no longer work.
Heart of Earth is in the Pit of Death, accessed through doors near the doors to the Hall of the Mountain King. Both doors must be opened using a golem of earth. Once in the Pit of Death, one will come to a building called the Conventicle of the Dead, which can be opened either with an earth golem or by retrieving the Key of the Conventicler.