Mouselook is a view familiar to gamers, particularly “first person shooter” games. It is required in some situations in Second Life, particularly in role play, where shooting weapons of some kind is needed.
In mouselook, mouse movement changes the camera view. Typically also, clicking the left mouse button activates an action, such as shooting.
First of all, check to be sure that mouselook functionality is enabled in Preferences → Move & View -> Mouselook -> Enable Mouselook functionality.
Now, mouselook may be activated in a few ways:
If you need to click on something while in mouselook, you need to press and hold the Alt key. This disables the “camera follows mouse” behavior that is normal in mouselook, and allows you to move your mouse over the object and click it.
Note that this holds for left click only, not right click.
User interface elements (such as your inventory) are normally hidden in mouselook; you can disable this fucntionality in Preferences; see the section below. However, some elements can still be accessed if you open them using shortcuts, such as Ctrl-I for Inventory. Again, you will need to press and hold the Alt key to do anything in the window.