Can someone explain teh crafting and combining in this game. I am so lost. Any help would be greatly appreciated.

Well I'm gambling on the fact that maybe you've done this part but I'll go ahead anyways. Some basics from the officials would be:-

Combining items
http://www.ryl2.com.my/txt_howto_combine.htm

Enhancing items
http://www.ryl2.com.my/txt_howto_enhance.htm

And here's a compilation of quick links through it's official forums:-
http://forum.ryl.com.my/viewtopic.php?t=8115

As for the 'combining' part, the claim made at the official is that "Combining items will always have 100% success rate.This is the major difference between combining and enhancing that still have the chance to fail.Pretty cool since I haven't got around to try it yet. Need to drop more gears for that.

The information in the official site is very incomplete. I'll make a separate thread about this, so everyone can learn. :D