You need to have equipment with empty enchantment slots to enchant. Try selecting Disenchant first; that will give you a list of any equipment you have with enchantments slots (for example, Derk, the blacksmith in the Broken Valley village, sells a couple of unique pieces of equipment with filled enchantment slots: a bow named Ranger's Rest and the shield Knight Protector), followed by equipment without enchantment slots.
Once you have at least one piece of equipment with at least one open enchantment slot, choosing Enchant will also give you a list of equipment, with whatever has an open slot listed at the top, and everything else below.
Removing an enchantment from something will give you that enchantment formula, if you don't already have it, but you do not recover any ingredients.
Potion and enchantment formula can be 'given' to the alchemist and enchanter (any left in your inventory after going into the alchemy or enchantment functions will be duplicates, and can be sold). Same for creature parts, though they can get added to the necromancer's list from any trade window, as well.
I kept a list of the enchantment and potion formula I had acquired, as well as the best creature parts found, so I could sell off any duplicate formula sooner, or any lesser parts.
