Really confused. What are essences and how do I get them? How do I transmute? What does sacrificing to the statue do?

They are used for muting. To reroll an item

When you combine Essence with an item, it's important to try and match the magical of the item with the essence for optimal effect. If you combine an Angelic item with an Angelic Essence, you are almost guarenteed to get a rerolled Angelic item. If you combine a Magical Item with an Angelic Essence, you have a chance to get a Magical, Rare, Mystical, or Angelic rerolled item.

This post was edited by ImCam on Feb 1 2010 06:08am

Yeah I have no idea what any of that means, and how do I get an essence in the first place? All I have seen so far is weapons, armor, and charms.

here is a guide for tranmuting process
http://forums.d2jsp.org/topic.php?t=38272468&f=276