I changed the controls for movement to the following:

E - Strafe Left
R - Strafe Right
D - Move forward
F - Move Backward

After doing that, I am no longer able to use E and R in menus such as inventory (pickup one, pickup all, drop, etc.) and the map (E for current location). Reset controls to defaults and the keys work. Looking at the default controls, I made note of the actions that are set to E and R and then tried the new keys in case the UI wasn't updating to show the correct key assignment, but those don't work either.

It appears that they hard-coded some of the actions. You can change your default keys, and they will work in real-time. However, when you are in any of the UI areas or reading a book, anything expecting an "Activate" key press will only work when the "Activate" key is E. If you map any other control to E, it will take precedence and perform the function you specified instead of "Activating", like you would expect. More importantly, when you try to use the key you assigned to "Activate", it won't work because the UI is only coded to expect an E key press for the given action. It's super annoying, but it sounds like a comp sci 101 type error, so it should only take them a few minutes to fix if they look for the bug.

Makes total sense, and is most annoying. I have never been a fan of WASD for movement, and my current settings are my most natural keys for movement. svcks that I'll have to use the mouse to click on those actions, but is better than giving up my preferred movement keys which are used significantly more often. Hope they fix it.

The "R" key is actually the worse problem, I cannot find the assignment in the built-in config files. It appears to be hardcoded.

On the "Keyboard Binding Fix!" thread there are some ways around the problem but I'm not sure how to get around the "R" key problem, I did not rebind to use the R key for movement but to use another key to send "R" to the game.

It's worth a try, though.

Ignore old link, they moved threads around (headdesk)

New link: http://www.gamesas.com/index.php?/topic/1261029-keybinding-issues-2-hotkeys-numpad-cannot-drop-cannot-take-books-cannot-spend-dragon-souls-etc/page__st__100

Thanks for the link. Like I've read from others, I'm also unable to take books while reading them. Favorites isn't working either. There are some cases I've found where the remapped "E" key works, like when I'm in my inventory, but others where it does not.

This is very frustrating.