I never got into the full module development stuff in NWN, but I did figure out a way to create custom magic items and insert them into the official campaign. I figured I would post the process here in case anybody is interested:
NWN Item Process:
1. Open NWN Toolset (comes with the game, via main menu)
2. Create new area
3. Create new item via Toolset menu options
4. Export item into ERF file (this is only option for export)
5. Exit toolset, no need to save anything else
6. Download NWNExplorer_163 from NWN Vault website
7. Open NWNExplorer, use it to open the ERF file just created
8. Use menu tree to identify the item just made
9. Export as UTI file, name it something not already used by NWN.
10. Copy UTI file into NWN's Override folder.
11. Close NWNExplorer
12. Run NWN, load game as usual
13. Enable DM mode via "`" key
14. Type "DebugMode 1"
15. Place cursor somewhere on the ground/floor in the game screen
15. Type "dm_spawnitem <name of UTI>"
16. The Override UTI item will appear on the floor, pick it up!
17. Type "DebugMode 0" to return to normal gameplay
Note: Leto1.69 is a great savegame editor for character stats.
It can change item properties, but only temporarily because it does
not save into Override folder.
Overrides affect all modules unless superceeded by a HAK.