This is the new inventory UI. It is still drag-and-drop, but now when you mouse-over an item, its full details and description (if known) are displayed. Also if you mouse over an item in the backpack, the appropriate slot on the equipped list is highlighted. To drop an item, drag it onto the drop icon on the bottom right (I'm not quite satisfied with this being the only way to drop items as it currently is, so I'll probably implement a 'drop' command).
The Orange Item is an Artifact. Artifacts are the most powerful items in the game. Standard non-magical items are white, minor magical items (if known) are green, more powerful ones are blue and then purple. Unidentified items will always appear in white. Potions have a colour scheme of their own. Cursed items (if known) are red.
Yes, the colour scheme is very World of Warcraft-ey. It works. Why not use it?