I do think it's important that people are able to solve issues themselves, otherwise you might hit the same problem later on and still not know how to solve it.
For now I think you should focus on one thing at a time: Either make an item to pick up from the included models, or make a custom model as a basic entity. Making a custom item from a modified version of an included model can complicate things more than necessary since there are several things you need to do right.
Try following these steps:
- Open the Model Editor, then go File > Import mesh
- Pick a model file, like /entities/bottle/amnesia/amnesia_bottle.dae
- Use the Shape tool (6) and place a shape down. Select the shape and "Create Body" on it.
- Go to the Body tab and set the mass to 5.
- Go to Edit > User Defined Variables. Set the type to Item with subtype Health.
- Scroll down and set the icon to a file, like /graphics/item/_temp_hand.tga
- Save As into /entities/custom/test/test_item.ent
Now go to your Level Editor, find the item, place it down and start the game. You should be able to pick up the item and use it (granted you have less than 100 health).
If everything works well so far, you can proceed by changing the mesh and icon (and SubItemTypeName)