Magic:
I'm now capturing souls (not sure how it happened) but only minor ones: wolf souls but not human souls. How do I capture human souls and, my real question, what do I do with them?

Alchemy:
I've read the manual but I'm still not clear on the difference between mortar & pestle, retort, and alembic and when I would use one or the other? And when or how will I leave the novice level?

Thanks in advance.

Im kinda a noob myself but..
Soul gems are required to make enchanted weapons and armor of you own, they are also used to recharge magic weapons, your home made and found both. You capture souls by casting.. think its soul capture, dont remember right now and then killing the enemy before the spell wears off. You cant capture human souls without black soul gems, think its called that..

What i have seen in alchemy is not that you use diffirent items at diffirent times, they all add up and make the potions more powerfull, atleast some of them i think.. You level up by making potions, and somewhat by collecting ingredients. You can probably also buy alchemy training from trainers.

Magic:
Every npc or creature has a soul of a specific http://www.uesp.net/wiki/Oblivion:Souls.
To capture a human soul, you need a http://www.uesp.net/wiki/Oblivion:Black_Soul_Gem
even though they require a more powerful soul gem (the black soul gem) human souls are the same strength as a normal grand soul
Soul gems can be used for enchanting items at the enchanting altar or recharging enchanted weapons
As Tokks said, http://www.uesp.net/wiki/Oblivion:Soul_Trap allows you to capture souls: you can affect an enemy with soul trap either through a spell or an enchanted weapon. If you kill the enemy while they are still affected by soul trap, and you have an empty soul gem large enough to hold their soul, then you capture the soul

Alchemy:
All you need is a mortar and pestle to make potions.
The other equipment just makes your potions better
If you have other equipment in your inventory, then it is used automatically when you make the potion.
As for novice level, if you are referring to your skill level then just by using the alchemy skill you will level up. Alchemy levels up very fast. If you are talking about the level of the equipment, vendors sell higher level equipment as you level up. Also, they will appear in random loot as you level up. A list of how alchemy equipment levels is found http://www.uesp.net/wiki/Oblivion:Alchemy_Equipment#Alchemy_Equipment

http://oblivion.melian.cc/ is a great resource for beginners and experts alike.

Thanks for all the great answers, especially the links. Just so I'm clear: I make the potions with the mortar & pestle and keep the other 3 items on hand to improve the potions one way or another automatically, is that it?

You can click on any of the four apperatus and makes a potion.The game will automatically use all four.

Once you start getting higher levels of apparatus, you may have to be more careful what you click. E.g. if you have both a Novice and Master mortar and pestle, you'll want to click on the Master one to make the best potions. With multiple levels of more apparatus, I'm not sure which one would be automatically used. Best bet is to sell the lower-grade apparatus as soon as you find better.

Well, they sure seem to be scarce; I keep coming across Novice only.

The better stuff only becomes available when your level increases. It's almost all generated by leveled lists that depend on the player's progress through the game, and the apparatus that isn't is fixed at Novice (that's the free-to-members apparatus in the Mages Guilds).

Alchemy shops will sell up to Expert level equipment as your level increases. Master level equipment must be found as random loot at level 17 or higher.

where are the best places to get master equipment?

Conjurer dungeons are the most likely places to find alchemical apparatus, and the good stuff will randomly be in the boss chest(s). Necromancer lairs are a close second.

So which of the easy to find food ingredients can be used to make the best potions?

It's hard to pick a "best," but from food, at Expert level, you can combine Radish and Venison for Chameleon.

Strawberry and Flour make Reflect Damage.

Any combination of Bread Loaf, Tomato, Orange, Rat Meat, Pumpkin, or Onion will produce Detect Life, along with Restore Fatigue. Several of these combinations work at Apprentice level.

you prolly have to have a bigger soul gem