OK, just got this transforming skill and I'm glad I knew something about transformations prior to getting it. Can't buff myself, but can be buffed by the Adventurer Guide. Can't transform with pet/servitor out, but can call him up after transforming. Best armor and weapon before transformation will help stats. But I can't say I noticed anything extraordinary about Inq. skills; what am I missing? And I really miss my healing skills while transformed.
Inquisitor should be rather self-explanatory...you kill things with magic while you're using it (and it's useful for buffing yourself and party members with Holy Weapon, which is otherwise not available to SEs).
You can freely change your equipment out while in Inquisitor, just like you can with any other transformed state. Your stats don't change at all; the only gameplay difference is that your normal skill set has been replaced by the Inquisitor skill set. You also retain all of your passives.
You've probably figured this out by now, but you can freely change between Inquisitor and normal stance. There is a short delay imposed on both stance-switching skills, though. Casting speed buffs and spiritshot-use help you enter Inquisitor very quickly, whereas Haste and other attack speed buffs help you return to normal stance more quickly when you want to switch stances during PvE or PvP.