On active use (using the skill upon a weapon/armour), it yields specific information on the item, including its damage/armour rating and condition, as well as all sort of properties related to the item material and crafting quality.
It also marks the item as identified, if it isn’t magical.
On passive use (clicking on an identified item), 30% Arms Lore allow you to read the numeric information of the item properties (eg, “30% Enhanced damage” as opposed to simply “Enhanced damage”).
This effect can also be achieved with 30% Item Lore.
Arms Lore is also required for crafting weapons and armour with Blacksmithing, ranged weapons with Bowery and armour with Tailoring. For more information, visit the specific sections for these skills. It is currently believed that you need 65% arms lore to be able to craft from all metals.
Please note: The quality of a crafted item is not based upon your total arms lore skill. The quality is determined by your crafting skill.