Parrying with a shield is a skill activated by the player, who can also block with a weapon in the same way but deflecting less damage.
To parry/block, press the V key (default, I remapped it to the mousewheel) and hold. As long as you keep the key pressed, your character will bring up the shield in front of him and deflect a large amount of incoming damage. While blocking, however, you cannot attack and you burn stamina, which is extremely important (run out of stamina and you're screwed, since you won't be able to sprint or even swing your weapon).
Beginning characters are mostly melee hybrids. With a group of them block is a useful skill in PVE to take down tough mobs, since the player with aggro backs off slowly with the shield up and the other guys hit the mob from behind - it does more damage and it makes it easier to avoid hitting friends with splash melee damage. I thought I'd taken a screenshot with block up while doing this with a group against an ork soldier (npc) but the image I have shows me with the shield down because I was still hitting the monster while backing away. Once I hit block, I bring the shield up to the front of my body. The two cute guys behind the ork npc are players in my party.
I can't speak of block in PVP because I haven't used it - stamina is even more precious in this case. There are however stamina potions, as well as spells (e.g. I saw a spell called 'mana to stamina' listed at the mage store and there may be more), so it may well play a part in PVP when people have ways to recover stamina quickly while fighting.
Archery is a lot of fun, but difficult as well. The screenshot below shows my ork group fighting an npc ork. I am using archery. The guy just in front of me kept strafting right and left to avoid getting hit by the archer mob (you can dodge arrows and spells if you are quick). I hope that those arrows sticking out of him were shot by the monster and not me, but they seem to be sticking out of his back... ahem...
I've decided to make a human character and try to play it mostly as an archer to see how viable it is as principal weapon skill at higher skill levels. The project is still work in progress, but here's a screenshot of me shooting an approaching skeleton. It's much easier to use when a monster stops to cast or shoot at you, but I'm trying to use any opportunity to raise the skill, even if I have to switch to melee when a monster is on me.
You can just about see in the image a fading message of a skill-up in Armored Archery. This skeleton is close, but shooting at moving targets at a distance is quite difficult because aiming is not sufficient. You need to guess where they will be when the arrow gets there and aim at that spot. You need also to work in a curve and shoot slightly up from where you want to hit, because if you shoot straight ahead at something far away your arrow will end up planted in the ground somewhere between you and your target. Arrows fly in parabolas and leave a tracer line for a moment which can help people see where they're coming from.
As an alternative to farming arrows from monsters who use them or buying them at the store, I've decided to try making my own. You need a wood axe and a pickaxe to collect wood from trees and ore from ore-yielding rocks. Then you must use a saw at a workbench to obtain wood planks and smelt the ore (using tongs at a smelter) to obtain ingots. THEN you must take your ingots, ore and a woodworking knife to a crafting bench where you obtain arrows if you also spend some gold (why?!? Why do you want my gold? I just ran around town like an idiot for the last ten minutes with my backpack full of crap to make these arrows!). Not all crafting requires so many steps, though. Cooking for example is less involved - at least the simple fish recipes I've tried.
Finally, I've made a human for a change of scenery. And what scenery! Running around the human lands is a constant Oblivion flashback.
