Did some more testing and it seems it's the English patch that breaks it. Unpatched install works fine, but the moment i run the (otherwise great) English Patch over it the game crashes or refuses to acknowledge anything i type when trying to rename my units.
Tried multiple compatibility settings, even tried typing in the IME pad. Same result. The input just refuses to 'take' yet the game itself is fine with WASD.
And yeah, items can roll with cursed prefixes that are fairly easy to spot by reading the descriptions. Stat wise they can be pretty good mid-tier items, though you'd have to pay to unequip them (or have a spell that destroys them) if you run into something better.