I was reading a walkthrough and it told me once I get the "good" head I can talk with it in the NPC window and it will remove the rest of its parts from my inventory. Now I only have the torso and the good head at this point. Am I doing something wrong? Or perhaps I was misled.

I'm not sure I understand the question. You're doing the Wizard promotion quest in MM7, right? There are two heads to find; the right one is near the stables in Bracada. There are six parts in total. You can drag them to the golem icon in the NPC window to assemble the golem, then visit the wizard who gave you the quest to animate it. There's no conversation to be had with the golem; once it's complete, it will protect your castle in Harmondale.

I discovered the trouble. I had got all screwed up and lost alot of my process in the game. I went and got the quest again and walla now the head is in my NPC slot and is putting itself together. Do you know how to mark a post SOLVED in this forum? Thanks for your imput.