Using Save Files
One simple method of duping involves using your save file for the character you want to dupe with. Create a backup of the save file you will be using and log in to your account. Then, you can either trade your items to a trustful friend or, according to EEggs.com, if you have two computers have one host the game you'll be dropping your stuff on. Log off of your account after trading or dropping and minimize the game. Move the backup save to your save folder and overwrite the save.
After you pull the game back up and log into your account, you should notice all of your items are back into your inventory. Pick up the items you dropped or get them from your friend, and you'll have double. Use the doubles to store them, sell them for cash or trade to people who need those items.
Using Game Exploits
There are two separate game exploits for single and multiplayer game play. If you're in single player, it involves using a teleporter. If you set an item in front of a teleporter and click on the item to walk through it, when you reach the destination, you should have the item in your inventory. Teleport back to the town from which you came, and the item you dropped should still be there for you to pick up.
In multiplayer, it involves the use of potions. Make sure potions are in your quick access keys and drop the item you want to dupe on the ground. Walk away from it a certain ways and click on the item again to walk towards it. Just before the character picks it up, click on a potion and look for the duped item in your inventory. If it's there, drop the potion on the ground, but instead of dropping as a potion, it will drop as the item you're duping. The timing takes practice, but once you get it, it becomes very simple. Also note that according to GameOgre.com, don't try to have two same, duped items on the ground because the game will see it as a duped item and delete it.