Hi Celticmoments,
Anthony_Tx is correct! In order to specify whether your item is new or used, you just need to click the "Choose Item Specifics" link that appears directly below the "Category" field once you have selected your category. The fields available in this section will vary by category, but just about every category offers you the ability to specify whether your item is new or used.
I hope this information proves useful. If you have any additional questions or concerns, please file a support request using the appropriate link on our help page: http://www.auctiva.com/free-auction-software-help/help.aspx
-Mike