Yalp, I took a stab at trying to answer your questions. Sorry I can't really help much with a few of them.
How do you convert items for garg use? I believe there's a "convert" option on the appropriate crafting gump (e.g., sewing kit for leather items, mallet for stone items, etc.) underneath where you find the "repair" option.
which items can/can't be converted?
Someone else will have to answer this as I have not experimented with it. I'm not sure items will convert if gargoyles can't normally wear that type of item (e.g., hats, glasses) but I'm just going off a faint recollection of somethig I read.
New items with "basket weaving"? what's that aboot?
Tinkers can make baskets and alchemists (and perhaps fletchers) play a supporting role. I believe there are no new styles beyond what we already had and there's a book on basketweaving you have to buy from a tinker NPC in Royal City (Ter Mur). You'll also need plant clippings made from deco plants, clippers made by a tinker, empty bottles, toxic venom sacs (from toxic sliths), and wooden shafts (fletcher makes or buy from an NPC). Set the clippers to cut dry reeds and use on the deco plants. Use the tinkering gump to soften the reeds with scouring toxin the alchemist made from the venom sacs. Use the tinkering gump to make the basket of your choice from the softened reeds and wooden shafts. If you say "give seeds" you'll get a box of seeds and a Plant Spawner bag that instantly makes some deco plants in the color of your choice. If you say "give crystals" you'll get some other spawners to make certain resources you would normally have to go out and gather (e.g., toxic venom sacs). You may want to find toxic sliths and try killing them. Then there's also silver serpent charming...quite a hoot and will come in handy for making dyes.
Housing? Use the character aging vortex in the gate room you'll find near the Haven bank to instantly age your character 15 days so it can place a house in the normal fashion.
Embuing which items?
Keep your eyes peeled here on Stratics because I'm sure this will be a hot topic. I have danced around the edges of it yet and haven't really waded in other than reading tons of posts about it!
How do you fly? Open the racial abilities book on your paperdoll and look for the flying icon. Drag to the desktop in 2d or stick it in an SA hotbar. Click to fly; click to land.
How do you get a suit of armor together, when you can't wear gloves, headgear, crimson's, quivers, etc. Again, keep your eyes peeled and be sure to join in the discussion.