This is a walkthrough for THE FIRST CRAFTING QUEST.
Also, Scroll down to the fifth post for a walkthrough of Crafting a Level 5 Item.
NOTE: for level 55 crafting, please see How to Craft Level 55 Gear by Physiologic.
The first thing you have to do is find Burke the Blacksmith. He has set up shop across the way from Ozz the Merchant.
Burke's Initial dialog box does not have a button for crafting items. Instead, he has a quest for you. Once completed, he will give you materials and a recipe for a blue beret.
Here is the quest text.
Go into Forest Haven I and slay four zombies.
When you turn in your quest, this is the dialog box. Be sure to select which recipe you want. Jewelthief is an archer, so he will take the archer's recipe.
This is Jewelthief's inventory in the crafting section. Note that the scraps can be stashed, but not the recipe.
This is Burke's dialog box after you've completed the first quest. Note the button that says "I want to craft items."
When you tap the "I want to craft items" button, you are shown a list of recipes. Find your recipe in the list. Jewelthief's quest reward recipe is at the top of this list.
On the recipe page, any items you own that are needed for the recipe have checks next to them. If you have all the necessary items, there is a COMBINE button at the bottom of the page.
This is the confirmation dialog box that appears after you tap COMBINE.
Note: the recipe is destroyed in the crafting. It is a single-use item.