If you're running out of room in your inventory and don't want to ditch any of your gear, consider trying to find a companion character. These companions can be found at various places throughout the world and will agree to join you on your journey (temporarily). You can trade equipment with these characters, which will allow you to dump your equipment on them, making you virtually unencumbered. Consider this option when you not only need help with bad guys, but help carrying your crap as well!