Daft question, but the little triangle next to some of the items in the inventory, what does it mean?
I know that the symbols to the left mean favourite, right hand, left hand etc, but I cant figure out what the triangle means?

It is better than what you currently have equipped.

I think it might mean it's an upgrade for your companion, but I'm not sure.

It's an upgrade for you in that item's category. So it will say a two hander is an upgrade if you have no two hander on you, even if you have 100 one handed and 20 two handed. It's not that helpful really, because it's wrong a lot of the time because it doesn't take every aspect into account and basically looks at raw current stats.

Read the loading screen tips. They refer to the triangle as an arrow. The arrow means the marked item is better than the one you have equipped.

I thought it was that but yeah, it doesnt seem to make sense half the time.

No, it means it is the best item you have in that category. If you have an Iron Greatsword and an Orcish Warhammer the Warhammer will have the arrow. Same with a Longbow and a Hunting Bow. The Hunting Bow will have the arrow, even if you have the Orcish Warhammer equipped, which obviously does more damage than a Hunting bow.

Same with armor.