OK I couldnt find the solution but heres a list of items and what they do (I dont think I've left anything out), and some hints:
[spoiler]Aqualung - Survive under water
Small Log - Expands in water to jump on (go out the 2nd hut to the right on dry land)
Pile of Stones - Creates steps
Pick Axe - Breaks through Rubble
Keys - Open Doors
Bucket of Water - Extinquishes Flames
Crowbar - Breaks Wood to get Watch
Axe - Opens Trapdoor
Computer - Plug into TV
Chip - Plug into computer
Watch - Give to Daisy
Torch - See in dark
Spork - Use on Troll[/spoiler]
After you break the trapdoor in the hut, you can go down. Make sure you have the torch.
You need to expand the computer memory and plug it in to enable access into the computer (literally!) and this is where Daisy is lost.
Hopefully this is enough info for you without spoiling the entire game.
Oh yeah one thing make sure you get every single star on the first level before you give Daisy the watch, as you cannot go back to get them, and cannot complete the game. There are 11.