This duplication glitch will still work even after installing the version 1.2 patch (or on the PS3 version, which comes with the version 1.2 patch installed).
Acquire two or more copies of the same scroll. The number of identical scrolls that you have will determine the number of duplicate items you create.
Open your inventory.
Highlight the stack of scrolls and select them once.
Highlight (but do not equip) an item (either single or a stack) that you wish to duplicate, and drop it.
Close your inventory and on the floor will be multiple copies of the item that you dropped.
Acquiring a large number of identical scrolls can be difficult. However, as long as you can find two identical scrolls to start with, you can initially use the exploit repeatedly to duplicate scrolls. Once you have a large number of duplicated scrolls, you can then start duplicating other items.
If you try to duplicate a stack of items, duplication works as detailed above for duplicating with arrows. In other words, duplication of stacks of items works best if the number of scrolls is an exact multiple of the number of to-be-duplicated items in your stack. So 33 scrolls can be used to duplicate 11 rings (creating 3 "items" on the ground, each containing a stack of 11 rings). Or 1000 scrolls can be used to duplicate 100 potions (creating 10 "items" on the ground, each with 100 potions). Using stacks can be much more effective when duplicating large numbers of items, in particular because it reduces the number of individual items on the ground, preventing game lag problems.
Attempting to duplicate any quest items will not work.