Understanding your players stats
To view the stats menu point your mouse at the graph icon and select the stats tab. The stats menu shows your skills and equipment status.
Your skills will increase depending on how you play the game. For instance if you fight a lot of monsters your attack, defense, strength and hits will increase. If you cook food your cooking will increase, cutting down trees increases your woodcutting etc...
To determine how close you are to advancing a level, point your mouse at the skill you are interested in. The number of experience points you have earnt so far, and the number you need for the next level will be shown at the bottom of the panel.
Your equipment status indicates the power of the items you are currently wearing/wielding in your inventory. The armour value is the total of all the defensive items you are currently wearing, and modifies your defense in battle. Weapon aim indicates how easy the weapon you are holding is to aim and modifies your attack skills, whereas weapon power shows how much damage the weapon you are holding can do and modifies your strength skill.
You should try to wear the items which give the largest values in the equipment status section. A fully equipped fighter is able to wear a helmet, body-armour, leg-armour and cape, as well as wielding a weapon and shield.