Figured id try this game as it looks fun. I am a bit confused on skills and stats.

1- I can gather what strength and intelligence do but what does dexterity do?

2-The stat system is different than what i have played before. Is it like elder scrolls where you get better at doing something from doing or is it something else?

3-What does track and sneak do for skills? Is there some sort of backstab you get from sneak and does track give info or whatever?

1.) not exactly sure as it wasn't in the manual (not that I saw it anyway) but dex is for jumping, swimming and the like

2.) no, you get skill points at level up. Those skill points you can convert to skill increases at the Ankhs, if you have the proper mantras. Mantras are scattered on walls throughout the Stygian Abyss, usually near the Ankhs, or are told to you by NPCs. Be sure to write them down.

3.) never found out myself tbh :P

Dexterity affects some of your skills (like acrobat, lockpick, search, swim, sneak, etc). I think the game uses some combination of skill level & stat level whenever it does a skill check. Sneak makes it harder for enemies to detect you. I don't think it gives any attack bonus. Track helps you detect creatures (messages like: 'You detect a monster to the north.') I think both these skills are fairly useless...

I dont get this game at all. Was it made by a bunch of retards or were they high when they made the movement and fighting system. Ive played many other 3d rpgs like this and none of them were as hard at moving/fighting in the game. Is there an alternative way of changing the controls to make them at least somewhat understandable? I can barely fight a rat in the first room. i like the game's idea but whats so hard about wsad for movement and click and hold for attacking. God...

First of all, Underworld was (afaik) the very first 3D FPS RPG... might want to keep that in mind. :)

Second, yes, the controls take a bit of getting used to, but... technically the game does use WASD for movement and mouse click for attacking. The layout is slightly different from what you might expect, though:
W is run forward
S is walk forward
A and D are turn (rather than strafe) left and right
X is backwards
Z and C are strafe left/right.

(This means Underworld's SZXC is like most modern games' WASD setup...)

And for attacking, depending on where your cursor is when you click the mouse, you'll perform one of three types of attacks. If you hold the button a while, your attack charges and will be more powerful.

If you don't want to use the mouse to attack, there are keys mapped for the three kinds of attack. The reference card has full keyboard controls listed.

I don't think there is any way to reconfigure the controls (unless you use a key mapper program - that will mess with your notes when you try to type in the automap though).

Just to elaborate. If the mouse cursor is at the bottom of the viewscreen when you attack, you'll do a low attack. If the mouse is at the middle when you attack, youll do a middle swipe attack. If the mouse cursor is at the top of the view screen, you'll do a high attack.

So for smaller monsters, have the mouse cursor at the bottom when you attack. For bats, those imp things, and the like, attack with the mouse at the top of the screen.

Combat in this game is very, very easy once you get the hang of it. You can move back and forth when you fight. Move back to dodge, then move forward when you attack, then rinse and repeat. This was a big downfall for me, combat in the game was far too easy.

Ive been unable to get used to this way of playing. But i will try later with everyones advice. Just out of curiousity, in the UIltima Online series, are there any games where it is not online play. Or is there a game that incorporates the same single player experience, but with U Online's skills and character building? I find the class system to be fun, but i would prefer if there was a game like that was single player.

I used the DosBox keymapper, and I actually kinda like how it messes with the notes. I feel like I'm writing in some ancient code :3

After searching a bit It seems like there is no version of UO with just single player. Its too bad, i like the game but i dont feel like paying 120 for a year basis. Are any of the original or spinoff ultimas like that game?

Use google to find a game very much like Ultima Online but free.