To activate the Ultima VIII cheat menu, open up edit.com (or any other text editor) and put this in the new file:

e12a
01 01
w
q

Then save the file as avatar.deb.
Now exit edit, and type debug avatar.dat < avatar.deb on the command line.
Now your game has been cheat enabled. To use the cheat, left click on the avatar once and that will bring up a cheat menu. Shift-F1 will also bring up a list of hot-keys that also let you cheat. If you cannot read the list of hot-keys, these are some of them:

Shift-F2: All Weapons
Shift-F3: Explosive Items
Shift-F4: Press once for invincibility, press twice for immortallity, press
three times to turn it off.
Shift-F5: All Armour

The rest you have to figure out for yourself.

Many thanks to Dr. Shade for supplying these codes!