By clicking on the Create new item link you've opened up the create new item form screenshot of which can be seen on the image down below.
The form is simple (when compared to adding a new client form, for example) and it won't take too much of your time figuring out all the info that's required to create a new item. Item number is the numerical ID that you'd like to assign to this particular item. Item name should be a short descriptive name for the item (this will show on the invoice). Item unit defines the quantity measurement that's going to be used with the item. This can be pieces, kilograms, litres, etc. Item rate is the price at which you plan to sell the item. Item tax dropdown field allows you to select a value added tax rate that's going to be applied to the item. Tax rates can be configured in Global Settings, we'll talk about that later. Notice that each new item can have a different VAT rate.