Arx Fatalis/Alchemy

As the game manual will tell you, three basic items are needed for potions, the ingredient, (reagent) an empty bottle, and a distillery. The manual also states that there is a distillery in the lab of the human kingdom. (Let me clarify this because I know you newbie itchy alchemists out there will be wondering with frustration just like I was. So I'll give you the answer. The observatory is not the lab.)

The combining of the items is rather simple. Double left-click the ingredient so that it is in "use" mode and bring it on over and click on the empty bottle. Then do the same with the bottle filled with powder onto the distillery. Double left-click the powder-filled bottle, and put it on the distillery and left-click. It'll make bubbly noises for roughly 1 1/2 seconds, and then you'll have a new bottle of potion. You're avatar might even comment out of his sense of accomplishment. Now, to get the powder, you can either buy it, but why, or you can obtain it from using a mortar and pestle to grind the item that produces it. Example: Lilly pads produce orange power when ground with a mortar and pestle. You can do this simply in the same way you combine items, which is to double click the mortar pestle and put it onto the item such as the Lilly pad, and then click. Now you have powder where there used to be an item.

Note: Items to be combined can only be combined in the correct order. You can't use a Lilly pad on a mortar and pestle, nor a bottle on powder. You must use the pestle on the item, and the powder on the bottle. This confused me for the longest time. That's the basics.