I just can't figure it out ... it doesn't mean it's better, than your current item, or that it's favorited, ... so what does it mean?

If you mean what I think, it is the items that are on your favorite list.

That indicates that it is an upgrade for your current equipment.

Hmmm , i thought it meant it was better than your current item , have you tried looking in the game manual(if you have one) They usually tell you everything about the interface in there.

Yeah ... looked all over.

It is the little triangle on the right of some items (not the one on the left which indicates Favorite status) or the L/R equipped status.

I'm pretty sure it doesn't indicate a NEW item either, as one of my Imperial Armor items I've had since the very beginning has one of these little triangles.

Hrm ... maybe it does indicate the BEST item of that type ...

Interesting.

The triangle is commonly known as Delta and it signifies that it is better than what you currently have equipped.

Nice addition.

Is it type based or damage based or something? Like say if have a dagger equipped, will it have the arrow on a war hammer because it has more damage?

It seems to be type based.

So a dagger might be topped by a sword (because it's one-handed) but a bunch of arrows will also be marked (because arrows are a different type) as well as a two-handed sword ... etc.