On the left are several general control icons such as those to access the character sheets, inventory, spells, game controls, etc. And across the bottom is a row of icons specific to the character currently selected. Among these are quick weapon slots, quick spell slots for spellcasters, and buttons allowing access to special abilities such as thieving skills and the party formation controls. Conversation utilizes a menu system, although the amount of talking is far less than in either of the aforementioned titles. Inventory is based on a fixed number of spaces and total weight.
Every item takes up one space, although some are stackable.
It's probably possible to play with the mouse only, but most if not all players will probably use the keyboard as well. This is not to say that the engine and gameplay have not been improved. Indeed, a good number of major and minor changes have been made to the engine, both at Black Isle and at BioWare. The action in Icewind Dale is based on a pausable real-time system that allows the player to stop at any time by simply tapping the space bar. Easy battles can be handled well enough without pausing, but for the main ones, it's likely that you'll want to stop at least occasionally to issue instructions, use potions, etc.