To change an item's Abilities, you can either right-click it in your Inventory screen (there's a little tab marked "Abilities" below its description), or right-click it when it's in your Weapon slot in the main game screen. (Doing the latter with Azuredge can be tricky, as in some versions the Throwing and Melee forms look exactly the same.) Other items that have Abilities are the Book of Infinite Spells, the Rod of Lordly Might and any launcher (Bow, Crossbow, Sling): The Abilities button lets you quickly change which of your ammo slots you want to pull ammo from.
One thing i've noticed with Azuredge is that even when using it as a melee weapon, you're still stuck with just 1 Attack per Round.
