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Did you save your old game file? If so, just put it back in the Save folder in the C:\Program Files\Activision\WizardsWarriors folder. You should be able to continue your game from your current point.
If you do want to restart, or didn't save your old game, yes, you can transfer items. Just hit "Reset Adventures" from within any city, switch to Valeia, and enter the Inn.
-Sazerac
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