Credit goes to The Jupiter Adept and Hero of Time on the Forsaken Forums.
Bombs: Use to destroy cracked blocks or walls. Unlike other Zelda games, you have unlimited bombs.
Boomerang: Used to attack enemies from a distance, pick up far away items and hit switchs in the distance.
Black Rupee: If you collect this Rupee, 80 rupees will fall from you as 4 small red rupees. This is a handy way to steal someone elses rupees and it's even better if rupee fever is on because the rupees that fall out will be worth double.
Bow: Everyones favourite way to practice archery. Shoot arrows normally or charge them up to increase power. Again, you have unlimited arrows.
Fairy: Grabbing one of these will refill several hearts in your energy bar, which is about 5 or 7.
Gnat Hat: Used to get through tiny holes in walls.
Heart Container: Adds an extra heart space to your meter. There are 2 in every level and are always at the end-of-stage warp.
Keys: There are special Keys you can get at the end of each level.
Silver - To get the silver keys you must collect over 1000 rupees in each level.
Gold - To get the gold keys, you must beat Silver level Vattis place, then collect over 2000 rupees in each level.
Hero - Finally, to get the Hero keys, beat Gold level Vattis place, then collect 5000 rupees in each level. The Hero level Vatti place is hard, because instead of having three stages, it has nine.
Magnetic Gloves: Used to either pull you towards or push you from special blocks depending on weather it's positively or negatively charged. Can also pull other players toward you.
Pegasus shoes: Press A to dash quickly using these shoes. You can also push other players in front of you.
Roc's Cape: Works like the old Roc's feather. Press A once to jump then press A again to glide.
Rupees: You can get Rupee Fever if everyone has full hearts. This doubles the value of each rupee so:
Green Small = 1
Blue Small = 5
Red Small = 20
Green Large = 50
Blue Large = 100
Red Large = 200
Green Small = 2
Blue Small = 10
Red Small = 40
Green Large = 100
Blue Large = 200
Red Large = 400
Rupee Shards: Golden Rupee shards. Collect four to get huge rupee worth 500 rupees.
Rupee Wraith: Not really an Item but is found in chests. Will circle around a play and force them to drop rupees. To get rid of it touch another player and it will start haunting them. It will disappear after a while.
Small key: Just like every other Zelda game, use them to open a door. Normally leading to the end-of-stage warp, meaning that the person who gets the key normally gets the Heart Container.
The Medal of Courage: This special medal goes to the person who collected the most rupees during a level.