Whenever I try to sell items, the merchant says something along the lines of "Are you sure you want to pay more than these goods are worth?", implying that I'm paying for a service like repair instead of selling. Googling reveals that others have had this problem too. The general advice (which seems to have worked for other people) is:

1) Click item you wish to sell -> item moves to middle
2) Click Merchant's balance scale -> his/her gold moves to middle
3) Click the tick button -> transaction completes

When I follow these steps, the item I wish to sell moves into the column headed by a hammer icon (repair?), gold moves to the column headed by a magnifying glass icon, and the merchant still says I'll be paying more than the item is worth.

What am I not getting?

Sorry for the wall of text :)

Instead of clicking the scales on the merchant's side, you can select items in his inventory to match the value of what you want to sell. The scales button should only be used to even out the trade: it adds gold from the merchant's side (or yours, if you click your scales button) to compensate for a difference of value between what you're offering and what you've selected in the merchant's inventory. Like Raze said, you should keep high value items (i.e. those worth more than a thousand gold, for example) for later when you start out: store them in a chest you can easily get back to, and trade junk loot that you don't need for potions or better equipment.

The only transactions that absolutely REQUIRE gold are identifications and repairs. You can invest skill points into the corresponding skills to avoid paying a merchant every time, but it's also a good way of replenishing a merchant's gold supply to make further trades easier.

Also, you CAN give the merchant something more valuable than what you're buying, or even give him something for free. When you do that, the game will ask you whether you're sure. If you accept, you will lose profit in the process, BUT the merchant's attitude towards you will be better. Also, in general, the more you deal with one merchant, the better he thinks of you. A merchant who's well disposed towards you will give you better deals on his wares.

Finally, almost every NPC in the game has things to trade, so be sure to check the trade button whenever you're talking with someone. Even peasants and poor people sometimes carry very nice/useful items.

Aaah, so it's just a wording thing. Thanks!

Thanks for these helpful tips Pica. Nice to be able to stash stuff 'til later - I'm used to them disappearing!