I just got Daggerfall and I am having trouble on deciding what to use on my character. There are a bunch of skills I have no idea what they mean like harpy and stuff. I can't decide what is important and what isn't. Does anyone have a good character guide or something because I can't find it?

I'm sorry I can't be of a lot of help myself, but I think this kind of thing is the reason why the character creation process was designed as it is. If you choose to create your character by answering questions, rather than by selecting your class from a list or creating it from scratch, you'll probably get something more appropriate to your natural playing style. I'm not sure how those beastial skills (harpyish, giantish, impish, Spriggan, etc) really add up, either, but after encountering lots of harpies, then resting to heal, you will see the message, "your harpyish skill increased/improved."

Something I've never tried but just thought of. Have you tried setting your interaction to dialogue mode and left clicking on a harpy (or appropriate monster type)? There has to be some sort of use for the skill.

Personally I would stay away from the language skills for your first time through...I believe they have a small chance of an enemy not attacking...but I never really found them very
reliable...I'd just go with a strong warrior type first time...maybe even one of the premade classes...or use a premade one as a template and replace some skills with ones you like...
a great adventure awaits you...enjoy

Language skills make it so if you walk up to that type of creature it won't be hostile. For example, lets I have a high spriggan skill, every time I see a spriggan, I have a good chance of it not attacking me.

You can take a peek around the UESP or other such site for skill descriptions and hints, etc. Or have a gander at this http://www.gamefaqs.com/computer/doswin/file/29065/50211.

I don't find the language skills particularly useful. I mean they're a great change of pace and many people enjoy making "Linguist" characters with minimal fighting (I believe the Daggerfall Crossroads page on Svatopluk's website has a lot of stuff related to that playstyle), but enemies and the amount of languages are a bit too diverse for you to master them all easily. Then again, I've never tried, so who knows.

You may want to start with a stock class and over time think of ways you can tweak them to your liking. My first custom classes were simply modified versions of the stock Thief class to make up for some things I didn't like about them.

In other games I usually go with a strong warrior who can heal himself pretty well and go stealth at times. I can't seem to figure out the reputatiosn system though I can't change anything in it.

True, I think the only time I ever invested into a language was spriggan with my reguard ranger

That FAQ guide was very helpful but I have to ask what is up with orcs? Will I be able to talk to them or are they just beasts?

You know how, by Morrowind, Orcs are respected citizens in The Empire?

Daggerfall is before that. They are allocated to their own territory and exist kind of like tribes. They are generally hostile to humans, although there's some important Orc NPCs during the quest and the Orcish language skill will let you stop the "monster" Orcs from attacking you.

This will help http://www.youtube.com/watch?v=c30kq0n0T5w&feature=channel_page

A good guideline, at best. "Cheesy" and "incredibly powerful" aren't fun. You should play around with the custom creation and make some realistic and lore-realistic disadvantages. I like to play my Thief character with only leather armor. As junky as it is, I've had no problems getting through most of the Main Quest.

I did not enjoy daggerfall magic, so I always took the disadvantages of slowed magicka regen during day, a seperate one for during night, the inability to use magic during day and a seperate one for night, critical weakness to poision, because getting hit by poision is extremely rare, and regular weakness to disease because disease is uncommon, so I could get that immunity to paralysis which comes in handy, and other bad ass abilities, and I could still level up faster than normal.

You could also give forbidden weaponry for pretty much every weapon your character probably won't use. Unless you happen to be stuck in a dungeon that you've spent hours of progress on and lack a spare weapon and are forced to salvage those dropped by enemies, I think there's no harm in forbidding them.

My standard advice for RPGs is to try several different character types first, to get an idea what works best for you, before trying to create the character you plan to play through the game with.

An easy way is to play with some of the standard (built-in) character classes first, before trying to create a custom character.

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As others have said, the only thing the language skills do is give you a chance of avoiding combat with that type of creature.

I'll just add that the chance fo success is drastically reduced if you have a weapon readied. Makes sense: if you come at somebody with a sword ready to strike, they're probably not going to be interested in talking.

The only language available that makes any sense to take is Orcish. None of those other creatures are prevalent enough to matter, except for Daedra. Daedra are unlikely to stand still long enough for you to talk to them. But, one can always find Orcs. Just go to Orsinium and you can always find Orcs to practice on, a not-futile endeavor.