Second, Enchanting Items: This is definitely possible - I just financed an entire game practically on this spell alone, however you must do it from the spell in your spellbook; the scrolls for it are worthless (except as something to sell off). The enchanting system is a bit more complicated than in previous games, though: There are different levels of items to enchant, normal, good, and excellent, listed under "quality". First you are able to enchant only normal items, then as you improve, you move to good and finally to excellent. Jewelry is not rated, but I was able to enchant it with no problem even with "normal" skill. The only thing I was never able to enchant was the basic type bow you start the game with (forgot the exact name).

Things to remember: 1) the item you are trying to enchant can't already be enchanted. This includes any item with a "special" feature over and above the basic hit/damage percentages, whether it appears to be "enchanted" or not. 2) 50% chance is likely to have a whole lot of failures before you succeed - or you could get lucky immediately. The coin toss doesn't always go the way you'd like, even on succeeding throws. 3) You must match the item's quality to your skill (though it sounds as if you're doing this okay). 4) It's okay to fix the items if your enchant skill breaks them and try again - just like a fresh turn.