I've bargained with Fangir for a ring with some kind of "Stone Ring" that says "Cave Crawling - Tunneling"

HOW do you USE the items such as this?

No matter what, the dirt won't move, and Julia wont tunnel under it!

Just have to have items equipped to get their bonuses

As far as the tunneling bit goes, its like any other movement mode - everyone in the party has to have it to use it (or more likely, you have to move her out of party - solo - to use it)

Thank you. Your explanation refers to things I don't know how to do.
How do you "equip" an item? The ring that supposedly tunnels is now within the circle over one of her hands.

I'm also not clear on "if it can be highligted, it must be activated"
I wish I could see a video....this is exactly the sort of thing that should have been covered in extreme detail in the tutorial, as well as a manual.
"Highlight"? How? Activate? How?
It's not like there is a big colored button labeled "Activate Items Here". That is probably the trouble. How did you find this out? It's not exactly obvious.

I'll take her out of the party, and see if that works. Thanks.

You don't active the tunneling skill. You just have to have it (equip the ring and double check your skills list). And you have to tunnel alone, or with units who also have tunneling.---

Try to be more inquisitive and independent.

*sigh*

Okay, here's an extremely short graphic tutorial on items and skills since I can't exactly wrap my head around how you could possibly reach item maker stage without knowing the basics.

Step #1. Click on the party!

Step #2. Click on a hero! See attached image.

This is Woizek. He - like many others - has mostly passive skills, the gold and red items on the right-hand list. Gold means it's just a skill, red means it's a bad status (like poisoning) or a weakness (like this Fire Weakness here). You can also see one item that's written in white, and that one can currently be activated by double-clicking it.

What you are interested in is obviously the left-hand sketch. The upper set of circles represent places to equip items - helmet, armor, weapon, shield, and two rings. The lower eight circles are the hero's backpack. Now, when you click an item, a slot in the upper set should light up - that's where you must put it in order to use it. If you do so, the right-hand skill will gain new items and/or his statistics ("swords", "stars", "shields", "ankhs", "hearts", "boots") will increase.
There is also a "Teleport" button, which allows to instantly give item to any of your heroes outside the party at the cost of mana, and "Ground" button, which allows you to pick up and leave items in bags.

So yes, if the ring was in one of the "hand" circles, it is equipped.