Some tips to you~

There is currently 8 tiers in the game
Higher tier items are usually 20-30% stronger than the items in the tier below
To find highest tier ressources, you will have to venture deeper and deeper into the open world PvP zones
Items generally get repeated across tiers, So if there is a T3 broadsword, there is likely going to be a better T4 broadsword that is quite similar
Higher tier versions of the same item do sometimes get extra abilities for you to choose from

There is currently 3 rarity levels for items. Common, Uncommon, Rare
Uncommon and Rare items are not a better version of a corresponding normal item, but they are a totally different item. While the broadsword is a normal item, the 2h sword is an uncommon one and will be significantly different in terms of stats and abilities.
Each rarity level increases the overall power of the item by 20-30%. So you could say that a T6 common item is about as strong as a T5 uncommon item

When crafting an item, there is a chance to a get a higher quality level. A higher quality level means that the base stats of the item, are higher than usual, but the item itself is exactly the same. For example, a “masterpiece” T4 broad sword will do more damage than a standard quality T4 broad sword.

Cost vs Power
The power of an item increases by around 20-30% per tier/rarity level
The cost of an item increases by a much bigger factor.
One reason for this is that we want to have an interesting risk vs reward curve, i.e. we want players to actively decide whether they bring their best and most expensive gear with them (at a higher risk) or whether they use lower quality gear instead and reserve their best gear for special situations
Another reason is that it helps to balance the game by giving less advanced players a fighting chance against more advanced players
Currently (February 2015), silver cost for items (crafting and repair) increases by a factor of 3 per tier/rarity level. We will carefully evaluate after this alpha test whether that factor needs to be adjusted (or, whether we leave it as is but adjust silver spawn rates)

Cost of use
If you use your Albion Online Silver, they will lose some durability
Per tier, the durability currently increases by a factor of 2. As the item cost increases by a factor of 3, the cost of use essentially increases by a facor of 1.5 per tier. I.e. if you fight mobs in T4 gear, you will need 50% more silver to repair than if you fight mobs in T3 gear
To compensate that, mobs currently drop 1.5 times more silver per tier, too
So in theory, the proportion of silver income used for repairs when farming T3 mobs with T3 gear should be the same as when farming T4 mobs with T4 gear
Having said that, based on qualitative feedback received from players, we are currently not sure how well this works out in practice. We can promise you to carefully look into this and make the required adjustments.