Well, Items that you don't need but COULD be used for an alternate solution are ok though (such as in KQ 1, you could put the giant to sleep with the fiddle, or you could just wear the ring in which case you don't need the fiddle, but it still had a use).
One thing that puzzles me now that I mentioned dead fish...Doesn't either Mordark or Manannan SMELL Graham carrying it? I figure Manannan would, and alert Mordak to Grahams presense at least...