The easy one to use is Near Infinity. (Or at least *I* find it easier to use, some misguided souls swear by IEEP, and there are others). Google will turn it up.
As to how to use it - open an item from the game (theyll be in the .ITM folder in NearInfinity) and save a copy of it. Choose an item as close to what you want to make as possible. Start experiemtning with values. When your done put it in your override folder and use the CLUAConsole to get it into the game.
The infinity engine was never intended to be modified, its all done by 3rd parties who have deciphered file formats, so no 100% accurate documentation exists and some parts are still marked 'unknown'. You can find more information at
www.teambg.net .