One last issue and my game will be good enough to play through. When I search someone or something I can't exit unless I "take all". When I hit the activate key again nothing happens. When I hit esc it takes me to the control/exit/save/setting menu and then back to the item inventory. Any ideas or suggestions on how to fix this?

Are you sure you're using a fully updated version of the game? It should be 1.3.10.0. Anyway, you must use the tab key to get out or when you read a book and you don't want to take it.

Thank you for the reply. Discovered it was the character menu by pressing every key on the board. Wasn't tab because I have assigned different keys ( i use the number pad not default) The game should update through steam right? I have it set to auto.
2 days and 6 hrs of research and scratching my head later I am finally able to play the game. I don't know why the PC UI had to be so frign trivial to Bethesda. Assigning keys on a keyboard should not be this complicated, and has been one of the most frustrating things I have done in a while. It was nice in oblivion, if you wanted out of the body/item you just simply hit the same button that got you there.
Ok I am done ranting...Thanks again for your help:)