Suggestion: keep an alternative outfit in your backpack or bags to wear when you're not fighting. This is great approach to use for a role-playing/realistic point of view. The only downside is that it takes up room in your pack(s) that could be used for other items.

Stats First (Power Play) - Power players are primarily attracted to an item's stats and how it will improve their character's performance. They are willing to wear any item that improves their stats even if it includes, for example, wearing a dress on a male character!

If you are focusing on stats, find out which will benefit your character class the most. There are often multiple paths you can select. You should ask other players of the same class, especially more experienced players, for their advice on what stats will best benefit your character. For example, Warriors should look for high damage weapons and might want to focus on Strength. Or, perhaps, Warriors might want to focus more on Stamina increasing items.

Which item is better?
This is a common question. The most general solution to this problem is to ask other players which item is the better item. Link both items in a party or guild chat channel and then ask other players what they think is the better item to use for your character. Feel free to ask why one item is better than the other. You will then learn and gain experience that you can use later, or if someone asks you for help. There are usually plenty of stat focused players out there that know exactly what the "best" item is.

Looks and Stats
This option is the best of both strategies. Find an item with stats that help your character that also looks great!

Item Selling
It's important to learn which items should be sold to other players and which should be sold to the vendors.
Other Players - What will other players buy? This is determined by demand and luck. Players will most often buy your item if it's one they consider good and is sold at the right price. Players will go for items they want or need. If you're trying to sell an item that is easily obtainable, it's unlikely to be purchased by other players. A good way to learn which items are valuable is to pay attention and watch auctions. You can see what types of items people sell and for what price. That way if you ever get one of those items and look to sell it, you will know what it will sell for. You should also ask other players for their advice. Also, item colors are important to learn. Blue items are often more valuable than green items, and so on.