Ok, here's the situation:

Patch 1.44 (game started in patch 1.44)
Act I, in battlefield, have around 1200 Normal arrows in my hero's inventory, not equipped. Death Knight, with convert arrows->explosive at skill 3, is the active character. I attempt to convert the arrows to explosive arrows, and nothing happens. I get the sound effect and everything, but arrows remain normal. I try a couple more times... no change. I start going through inventory, even switching over to the deathknights inventory, and discover that he now has 6000 explosive arrows on him. I sorta figure cool... probably no money problems for the rest of the game, so no more mindlessly buying normal arrows and converting them to make money, so I continue playing... hasn't really hurt anything, just saved time. Quite a while later I discovered that some of my items are now missing... Going back through old saves, it seems to have happened around the time of the conversion... most noticeably missing are the only yit charm I had found, and the bedroll. Both of which had been carried by the Death Knight. Now I don't really sleep much, and have enough money (and herbs) to buy/make as many potions as I could ever need, so the loss of the bedroll isn't/shouldn't be crippling, and the loss of a single +MP charm doesn't hurt much either, so the losses aren't exactly devestating, however having things randomly "poof" in inventory is sorta worrisome. No quest/quest related items seemed to have disseapeared, (though there may be 1 or 2 manuscripts missing... I tend to use my DK for "longterm" storage of things I'm probably never gonna use/need, and I tend to pickup all books/manuscripts in case they turn out to be useful.)

Anyways, mostly just a bug/report warning. Hope it helps.