Nirth: How does the item manager work?
First, you have to load an exported character file. You'll see its inventory (backpack only, you can't edit/export/import equipped items!) and contents of shared stash (those black-blue chests that you can find in various locations).
Then you can select an item, either by clicking on its rectangular outline in inventory/stash or by choosing its ID on the list. You have to know what the items are beforehand, because SIM doesn't provide any names or pictures of them!
Now you can export the item (to be able to add it to some other character, don't forget to use a descriptive name for it) or edit it (use Item Edit Helper button for more user-friendly experience than plain hex-editing, then Apply and Apply once more). You can also make duplicates of existing items.
After you're done, don't forget to hit Update button to save all changes to hero file.
One more thing - if you want to create some really powerful items, use uniques (bronze names) or set pieces (green names) as a base, because they have no restrictions on numerical values you can use, except for game engine limits, of course. All regular items (white, blue or yellow names) are limited, depending on your game difficulty setting.