can I create items

I should be starting my project soon. I was just wondering if it was possible to create different armor, weapons, characters, villains, etc...

Thank you for reading, and replying... (if you do)...

Oh and can i make the characters lie down, crouch, and jump...

Have you looked at any tutorials? That's exactly what you do with RPG Maker - in fact that's the basics of the game engine, and you build everything else on top of it.

I suggest you read through the help file and go through some tutorials, as what you're asking is beginner's stuff.

Check the blog as well, as there's a tutorial series on that taking you through creating a game from start to finish in VX Ace.

http://blog.rpgmakerweb.com/

Define 'create'. Do you want the player to gather items, and in turn use these to create a new item? There are several ways of going about this (and I'm sure a script exists), but I recommend doing what Shaz said: read some tutorials first. Once you understand the basics, you can try and figure it out on your own. If you're stuck, we're always here to help, but for now, read some beginner tutorials.