Check out the legacy version of the Horadric Cube.
Basically, the cube is not really needed anymore and could be removed. However, the new card transmutation is not very obvious, especially for players already used to the cube system. So I thought it might be a good idea to alter the cube card itself. When it drops it serves as kind of tutorial for card transmutation. Check it out!
[caption id="attachment_2072" align="aligncenter" width="200"] New text on the card...[/caption]
[caption id="attachment_2073" align="aligncenter" width="200"] This card can be transmuted![/caption]
[caption id="attachment_2074" align="aligncenter" width="200"] .. the cube is gone and here comes the reward![/caption]
The new transmutation system will be part of the next release (0.9)
In the current version of the game you need to build the Horadric Cube tower. Once built, put four items in the cube and you will get a random item of the next rarity.
Hope this helped!