Packrat mentioned the wishes and the options. To answer your other questions...
1. The rat skull was left over from a quest that didn't make it into the final game. It does nothing but consume inventory space. Ask me about a wooden flute sometime...
2. You don't need the lamp as proof of killing doshi-gin (or whoever had it). Just killing the intended target is enough.
3. Each character can get one wish, and three wishes can be granted (unless you use the tricks/cheats in the best tips thread). The first user has to use their wish on someone else; everyone else can wish on themself. So the first user stands a real good chance of getting stuck without a real wish.
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*B*
Save Early, Save Often Save Before, Save After
Two-Star General, Spelling Soldiers
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Give 'em a hug one more time. It might be the last.
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