This is intended as a brief summary of each skill and is by no means meant to include all possible uses of the skills. Skill levels are generally referred to as ranks. For example, 50 ranks in Teaching allows one to teach 3 pupils.

Armor skills grant the ability to use a specific armor and lower one's hindrance while doing so. Increased skill allows one to move more easily and to increase the protection received.

Leather is generally used by barbarians, rangers, and thieves. This is the only commonly used armor with the potential of not affecting stealth.
Light Chain and Heavy Chain are used by those who want something that offers more overall protection than leather, but not the hindrance and weight of plate.
Light Plate and Heavy Plate are generally used by paladins because their weight and hindrance are excessive for other guilds.
Shield is the ability to effectively protect one's self with a shield.

Lore skills ...

Animal Lore is the ability to handle animals, including ranger companions, leeches, and horses.
Appraisal is the ability to appraise objects, in order to learn things about them, such as weight and worth. Appraising creatures allows one to learn their difficulty versus one's abilities.
Astrology is available only to Moon Mages and is the ability to study the stars for predictions and for the creation of enchantments.
Empathy is available only to Empaths and is the ability to heal others and perceive health.
Mechanical Lore is the ability to create items, such as origami, armors, weapons, and magical items. This also allows for changing the appearance of items and people, as with embroidery and shifting.
Musical Theory is available only to Bards and aids in the performance of enchantes, instrument playing, and other bardic abilities.
Percussions is the ability to play percussion instruments, such as castanets.
Scholarship is the ability to learn from classes, reading library books and studying spellbooks.
Strings is the ability to play stringed instruments, such as the lute.
Teaching is the ability to teach classes to others. The number of pupils one can teach is affected by skill level. 1 student at 1-24 ranks, 2 at 25-49, 3 at 50-99, and 4 at 100-200.
Trading is available only to Traders and encompasses many trader only abilities, such as running caravans, holding auctions, and selling gem pouches.
Vocals is the ability to sing and is best learned with an audience or with Bardic enchantes. I suggest asking the permission of your audience before singing, however.
Winds is the ability to play wind instruments, such as the flute.

Magic skills ...

Primary Magic is the ability to cast spells effectively.
Harness is the ability to control mana.
Power Perception is the ability to see the amount of mana available. This ability is limited by your own ability as well as by the amount of mana actually present in a room.
Magical Devices is the ability to store magic in cambrinth and to manipulate all magical devices, such as runestones, magical fans, and wands. Use of constellation jewelry and invisibility rings also fall under this skill.
Targeted Magic is the ability to aim offensive spells.

Survival skills ...

Backstab is available only to Thieves and is the ability to ambush and stab an opponent when hidden.
Climbing is the ability to climb over obstacles or into some tricky area.
Disarm Traps is the ability to disarm trapped boxes without injury.
Escaping is the ability to escape webs, guards, and other such things.
Evasion is the ability to dodge attacks.
First Aid is the ability to tend wounds and remove leeches.
Foraging is the ability to find objects such as branches and herbs in the wild.
Hiding is the ability to slip into hiding without being noticed.
Lockpicking is the ability to pick open locked boxes.
Perception is the ability to see things, creatures, and people which might otherwise be hidden or invisible.
Scouting is available only to Rangers and is the ability to track people and creatures. This can also be used to run trails.
Skinning is the ability to skin and scrape hides, pelts, and skins.
Stalking is the ability to approach or follow a person or creature unseen.
Stealing is the ability to steal objects or coins from a person.
Swimming is the ability to move across bodies of water, both great and small.

Weapon skills ...
In this section, defensive weapon skills are placed first and then followed by the types of weapons most commonly used. Last are weapons not recommended for beginning players.

Parry is the ability to avoid attacks by parrying with a weapon.
Multi Opponent is the ability to handle multiple foes without suffering a penalty.

Light Edged is the ability to use small bladed weapons, such as daggers or dirks.
Medium Edged is the ability to use medium bladed weapons, such as scimitars and sabres.
Heavy Edged is the ability to use heavy bladed weapons, such as broadswords and longswords.
Two-handed Edged is the ability to use bladed weapons requiring both hands, such as claymores.

Light Blunt is the ability to use small bludgeoning weapons, such as cudgels.
Medium Blunt is the ability to use medium bludgeoning weapons, such as maces.
Heavy Blunt is the ability to use large bludgeoning weapons, such as flails.
Two-handed Blunt is the ability to use bludgeoning weapons requiring two hands, such as war mattocks.

Short Bow is the ability to use weapons such as horseman's bows.
Long Bow is the ability to use long bow type weapons, like forester's bows and hunter's bows.
Composite Bow is the ability to use reflex type bows.
Light Crossbow is the ability to use crossbows that require the shortest time to load.
Heavy Crossbow is the ability to use larger crossbows, such as siege arbalests.

The following weapons are not recommended for beginners.
Brawling is the ability fight unarmed by use of maneuvers, such as punching, choking, and biting.
Light Thrown is the ability to use weapons such as throwing daggers.
Heavy Thrown is the ability to use large throwing weapons, such as spears.
Short Staff is the ability to use some clubbing type weapons, such as lead pipes.
Quarter Staff is the ability to use long, heavy staves.
Slings is the ability to use weapons which propel rocks.
Staff Sling is the ability to use weapons that are similar to slings, though they are mounted atop staves.
Halberds is the ability to use large pole-arm type weapons, typically that do slicing damage.
Pikes is the ability to use large pole-arm type weapons, typically that do puncture damage.

This section continues onto other considerations here.