The Soul Gem is self explanatory. It is used for making jars to trap souls, and/or weapons. There are other things it can be used for too, but they haven't been discovered yet.
The path I walk is narrow and dark, full of lonelyness and sorrow. I face impossible hardships but I fear nothing. I have no one to trust, no one to console but myself. Do not pity me, for I have walked this path for many years and I have learned a few things. This is my path. And I walk alone.