In your Dagger folder you have a config file called Z.cfg. Open this in notepad and change the controls .dat file from what it says currently to 'viewplyr.dat'. Also at the bottom, if not there, you could add the following:
CheatMode 1
MagicRepair 1
Then save the file.
What these do are firstly the viewplyr.dat put the game into view mode and changes the keyboard commands to keys that are much more normal for us modern gamers,with 'WASD' movement; C to crouch, Ctrl to sneak, etc). When back in the game, hit Escape and look at controls to see the new keyboard layout. Now you can move the mouse to look around and move with the WASD keys, which allows for easier gameplay. You could also click in the 'Full Screen' box to end up with a display that is very Morrowind/Oblivion looking!! The cheatmode allows for cheats to be entered (find on the web) and MagicRepair allows for enchanted weapons to be repaired, as in Morrowind and Oblivion. You now click on peopleto talk, click on objects to pick up, click on doors to open them - if they're not locked! F brings out your equipped weapon, TAB opens your spellbook, etc.
I hope this helps