Items can be created from the Items tab or during Quote generation. When creating a Quote, any Items associated with the selected Template will be shown. Otherwise, Items can be added on-the-fly using the, + Add Item button:
When adding Items to a Quote on-the-fly, you can add previously defined Items or create brand new Items by clicking on the + Add New Item button:
When creating a new Item on-the-fly, you are limited to "Fixed Per Unit Pricing" which can be changed after by going to Items and editing the pricing structure of the Item.
If Yes is selected under Save Item for Future Use you will add the Item to your database, and also be given the option to Add Item to Template which will add the Item to the selected Template.