Light Sword for the Prince of Cannock. I forget what town it's in exactly, but you buy it in a weapon store. The Lightning Staff is the best weapon for the Princess. I would also give the princess a power shield if you can afford it, since it's a free midheal they can use whenever.
The flowing dress is the best armor for any of the characters, but I usually give it to the princess. The mink mantle, if you can afford it, is best for whoever doesn't get the flowing dress.
Thunderbolt blade is the best for the hero naturally, as well as all of the Erdrick/Loto armor.