Welcome. <img src="/ubbthreads/images/graemlins/wave.gif" alt="" />
The cat statue...click on it in you inventory...it will turn you into a cat for a period of time. There are others out there like that that will turn you into the depicted animal.
As to the charms, if you get a weapon with a charm quality, you can use those charms to that weapon, hang on, i will find you the spoiler link.
Polymorph is a spell that will turn an enemy into a rabbit or a frog - makes them easier to kill. <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />
You may want to check your armor - the royal chain is probably there.
Hope this helps.
