Back in the day, I've seen this done a lot with mages. Hell, I've even done it myself quite a few times

Picture this:
Mage selects a target, let's say it's a pretty beefy NPC that's about the same level.
Mage carefully tries to paralyze the NPC (I used to do this while invisible if they couldn't see invis).
Mage types 'steal sword knight' and gets the item.
I used to see a message sort of like:
You unequip and take a silver longsword from a silver knight. (if he was wearing it)
Got it! (if it was in their inventory)
Although I could never pull it off, I've seen it done on players too. The bad part about that approach is that paralyze doesn't seem to have that high of a success rate sometimes. If the mob can see invis, that makes it all that much worse. Imagine being a level 99 mage trying to paralyze a demon lord because he loaded something neat... You fail, he sees your invisible butt and starts wailing on you. Not pretty!

As far as knocking out opponents, I don't know of a current way of doing this other than paralyze/stunning blow/hyder kick. Perhaps a skill could be introduced that could let you sap someone in back of the head and knock 'em out cold. If you miss the skill check, you hit their shoulder or something.