Equipping items is done through the Inventory > Equipment screen, no other screen can be used to equip items.
The Equipment screen has a paperdoll on the left which contains all of the slots you can equip items to (assuming you have items for all of the slots), The slots will show up at all times, regardless of if you have items for that slot or not, although once you equip an item to a slot the border on the slot turned purple to indicate an item is equipped there, but at all other times the border will be green.
There are some fairly obvious slots such as Head and Chest and there are also some more interesting slots such as the ones you equip bags to and your Bonus slots.
Using the screen
When you click on a slot on the left of the screen you will find the middle of the screen will update to display all of the items you have in your currently loaded bag that can go to that slot. The currently equipped item will show up in purple text to let you know you currently have it equipped.
If you do not see an item on the list but you are sure you have the correct slot for it, it may simply be the item is too high level for you or is bound to a specific skill which you do not currently have. You can find out such information from the Inventory screen by clicking on the item and clicking Info.
Once you click on an item it should change color to indicate it is equipped, the paperdoll will then also show a preview of that item in the correct slot to indicate it is equipped.
If you are on the estate, you should pay close attention to the Bonus slot which is near the bottom of the slots in the top row of five slots as this is where you can equip the Drakos brand item which provides a useful boost to your HP.
**Switching between bags
**The Equipment screen by default only shows items in your Backpack, if you wish to equip an item out of your Sell Bag or perhaps another bag you have equipped then you need to click on the appropriate bag on the far right of the screen.