To enter the crafting screen, right click on a character avatar and select 'Item Workshop'.
Depending on what kind of combination you are going for, you may need a character with the Mephistics skill (poisoning weapons) or the Alchemistry skill, which doubles as a spellcasting skill for the Thaumaturge. Both Mephistics and Alchemistry are Mental Skills that several classes have.
All of the crafting icons other than the Merge button only appear at crafting stations in context. You only see "Forge" at Forges. You only see "Sharpen" and "Poison" at Hearths. Ditto for enchanting weapons at Shrines. In regular adventure mode you will only see the Merge button available.
In the right contexts, certain skills are substantially amplifed. At the Forge, Metallurgy is effectively doubled when you are at the forge working. Similar effects for Mephistics (poison) and Bladesmanship (sharpening weapons).
Here are some of the items you can combine in crafting:
Needle darts + Poison Dust = Poisoned Dart
Gauche + Poison Dust = Poisoned Dagger
Poison Dust + Hunting Knife = Poisoned Dagger
Poison Dust + Barbed Arrow = Poisoned Arrow
Cure light wounds + Cure Lt. Condition = Cure heavy wounds
Nematic dust + Mandrake root = Paralysis Dust
Piligrim Tea + Lithe Liquer = Stone to Flesh
Cherry wine + Lithe liquer = Crimson Ambrosia
Lithe liquer + Cure Lt. Condition = Cure Paralysis
Cure heavy wounds + Cherry wine = neutralize poison
Cure heavy wounds + Arsenic = Cure Paralysis
Cure heavy wounds + Amaranth = Stone to Flesh
Cure heavy wounds + nightshade = Remove Curse
Burning oil + draconic bile = Super Burning Oil
Burning oil + stink bomb = super burning oil
Burning oil + neutral medium = True seeing
Burning oil + cure light condition = neutralize poison
Paralysis Dust + Poison Dust = Medusa Dust
Paralysis Dust + Hemlock = Viper Ashes
Centaur Bane + Dracaena Petals = Remove Curse
Zephyr Cola + Cure lt. condition = Stone to Flesh
Zephyr Cola + Amaranth = Cure Paralysis
Zephyr Cola + Black Lotus = neutralize poison
Zephyr Cola + Burning oil = super burning oil
Valerian Root + archangelicus = bag of sparkles
Valerian Root + blood tamarinde = neutralize poison
Valerian Root + bitter tuber = Cure Paralysis
Valerian Root + black rose = Cure Heavy Wounds
Dracaena Petals + Arsenic = Poison Dust
Woundwort + Amaranth = Bag of Slumber
Woundwort + Cure lt. wounds = Cure Heavy Wounds
Woundwort + Cure lt. condition = Cure Paralysis
Black Lotus + Arsenic = Poison Dust
Harpy Crown + Blood Tamarinde = Blink
Arsenic + Grave Moss = Wolfbane
Arsenic + Coffin Orchid = Sleep Sand
Whiterot + Peckle plantain = Stink Bomb
Vial of Essence Spirit + Vial of Night Mist = Prematter Ectoplasm
Vial of Night Mist + Pipes Majestyl = Prematter Ectoplasm
Keep in mind: The order listed above matters (Primary + Secondary), you can put them in any order, but you need select the Primary item to merge or apply poison.
When you click an item on the bench, it tells you what skill you need to mix it and the level of the skill. So far I have seen either Alchemistry or Mephistics (Alchemistry is much more common). I have not found any items that need Nature Lore or Metallurgy, but I have some confidence that the latter exist. Cleve mentioned that a lot of the metallurgy tables are missing, but not all.
Keep in mind that if you click on an item and it says "unknown", it does not neccessarly mean this item cannot be combined with anything. It can also mean that it is not the "primary" ingredient of any recipe but it could be a "secondary". For example, if you click on a Cure Light Condition potion on the bench, it is marked as "unknown". But it is a secondary component to mix with Burning Oil or with Cure Light Wounds.
Combining items, may give you multiple stack of it (1 Poison Dust + 1 Barbed Arrow, can give you arround 20+ Poisoned Arrows)