ITEMS

There are several items Link will need to defeat Gannon.  The items are found in overworld, underworld, or both.  Certain items cannot be attained unless certain credentials have been met..

Treasures found in the overworld:

Blue Candle:  Lights rooms and burn trees, and found all over the overworld for 60 rupies.  Can only be used once per screen, but its an necessary item.
Bait:  Though seemingly useless, this item is needed in Level 7 in the first quest, and Levels 3 and 8 in the second to feed hungry Goryias.  Costs between 60 and 100 rupies.
Arrows:  Only works with the Bow, and Link must have rupies just to use this item.  Costs 80 rupies.
Bombs:  Though they cost 20 rupies, they're more cheaper when you get them after killing enemies.  They blow up walls and rocks as well as certain enemies.
Hearts:  Regain your life level by one container heart.  Though they cost 10 rupies at stores, hearts should be gained from killing enemies unless your life is in great danger.
Keys:  Though sold in stores between 80 and 100 rupies, this item should be found in almost all labyrinths.  A key can only be used once for unlocking doors.
Magic Shields:  Costs between 90 and 160 rupies, and protect Link from certain enemy attacks, better than the regular shield.  
Blue Ring:  Cost 250 rupies.  Cuts damage sustained to Link by one-half.
Wooden Sword:  You will begin with this.  Not strong, but you'll be able to get rid of some weak enemies at the start of your quest.
White Sword:  Two times stronger than the wooden sword.  5 container hearts is required to obtain this sword.
Magical Sword:  12 Container Hearts, 4 Triforce fragments required.  Two times stronger than the white sword, and the most powerful sword of all.

Boomerang:  They get you coins from places where you can't otherwise get them.  Very useful item despite an limited range.  Found in Level 1.
Recorder:  You must have this item in order to harm the Digdogger and get into certain places.  In Level 5 in the first quest; and Level 2 in the second.
Magical Boomerang:  Flies farther than the Boomerang.  In Level 2 in the first quest; Level 3 in the second.
Book of Magic:  Combined with the Magic Wand, they become an powerful combo.  In Level 8 in the first quest; Level 4 in the second.
Raft:  Help you cross seas.  In Level 3 in first quest; Level 4 in second.
Bow:  You must have this item in order to use the arrow.  In Level 1 in first quest; Level 5 in second.
Stepladder:  Helps you get across rivers and holes.  In Level 4 in first quest; Level 6 in second.
Red Candle:  Can be used several times in the same screen.  In Level 7 (both quests).
Magic Wand:  Use this with the Book of Magic to destroy enemies.  In Level 6 in first quest; Level 8 in second.
Magic Key:  Can be used over and over again to unlock doors.  In Level 8 (both quests).
Red Ring:  Increase defense by an additional 1/4.  In Level 9.
Silver Arrow:  Must be used to kill off Gannon.  In Level 9.

Other Key Items

Medicine:  Heals Link's life gauge.  Requires the letter in order to purchase it.
Clock: Freezes the enemies as long Link remains in that screen.
Compass: Reveals the location of the Triforce in the underworld.
Fairy: Heals Link. Some heal him by 3 hearts, others completely fill him.
Power Bracelet: Found by bumping into Armos in the overworld.
Heart Container: Increases Link's life gauge by one heart. Found by beating bosses and in the overworld.