Just getting my feet wet in Arena and DF -- can't seem to get into crates, barrels, and whatnot. Are they just decoration, or am I missing the 'Open" command somewhere?

Hehe, about 2 minutes ago I was in Daggerfall and was thinking "What if there is something really nice in here and I am too stupid to open it!?!?!"
So I have the same question!

Also, what happens when you can only install the small file and not Huge file for Daggerfall?

Nah can't open anything
Just a decorations.

I, too wanted to search the crates..

actually there are some crates you can open go to an inn and look at the chest in closets and all. go to the rusty orge logunge in dagggerfall the county not the city. upstairs theres a lot of beds with chests you can look in them though its illegal

Tons of daedric weapons in there too... Sometimes you can get 5-10 daedric items from those footlockers.

If you click on it and nothing happens, chances are it's just decoration.
Strangely enough, you'll occasionally come by chests that have a lid that looks like it's designed to actually open up. It must of been a feature that wasn't ever implemented as I've never got one to actually open.

Opening the random closets/crates you find in homes and shops isn't really worth it. It alerts the telepathic guards and more often than not there's nothing in them but a ruddy piece of clothing. The footlockers in inns are an exploit, and they will only yield Daedric items if you save before opening them, open them, empty them (I think), and load. The game's memory gets FUBAR'd and then upon loading they restock with Daedric items.

As far as I can remember, Arena containers cannot be opened.

Arena just has the "piles" of equipment/gold/etc.

i remember reading somewhere that those boxes and chests lying around in the dungeons (like that one lying in a corridor) was supposed to be openable and lootable, but it wasnt implemented.