Drop any item on the ground and walk back about five spaces. Make sure you have room in your inventory for two of the items. Click on the item and right when you are picking it up click on any of the items in your belt (the belt is the area that has 8 spaces for potions and scrolls.) If you did it right the box where it names the thing your clicker is on should name the thing you are trying to duplicate. Press the hotkey for inventory (I) and put it in your inventory. The original item should already be in your inventory. Make sure your inventory is closed while duplicating until you put the item in.
Thanks to Revolution readers Squin and Bantam!!