Dropping: squeeze R1 (right trigger) and press X-button.

Split stack: squeeze L1 and press X-button. Brings up a slider for selecting amount.

I used the mouse+keyboard before, but since H&H I decided to play with controller to ensure my Dad and Sister can play when they get beefier machines. They have trouble with mouse+keyboard.

My verdict: entirely playable with no keyboard or mouse.

Caveats:

* I haven't found a way to change camera distance, aside from having a mousewheel handy. I prefer zooming closer in the crypts so the camera is less janky against the roof. And farther when sailing.

* Unlabeled map markers -- which is okay with the number of icons to select from, but there are special cases which arise, such as noting distant visible land. Also, I haven't found a way to X-out the icons on the controller (anyone know?), for cleared crypts, etc.

* The crosshair isn't where melee attacks go -- instead it's based on facing, which is kinda-nice, since you can independently look around and fight/mine/chop... but kinda bad for spear/atgeir which are more difficult to aim. Pickaxe is also more difficult to aim. You can get some aim-control by blocking, which faces your character to the crosshair.

* Selecting "hotbar" items is not very quick, moving a cursor and selecting, compared to just pressing the number key. Keep items used in combat clustered together and it's not too bad, but gets worse when you want access to meads plus alt-weapons.