I asked this question around two months ago. I have since completed this game twice and I can confirm that there's an unlimited availability for all upgrade stones, each playthrough.
The hardest ones to get are definitely the slabs.
Regular Titanite Slab is a 100% chance drop off the Stray Demon, which you can battle on your second visit to Undead Asylum. Another slab is awarded for completing the Siegmeyer of Catarina sidequest. Although Titanite Slab is a rare drop off Crystal Lizards in the Great Hollow, it can also drop from Darkwraiths in New Londo Ruins, which respawn, making the supply unlimited.
Red Titanite Slab can be found in the Chaos Eater pit in Lost Izalith as a treasure to loot. It is also a rare drop off the Chaos Eaters themselves.
Blue Titanite Slab is found in the Crystal Caves as a lootable item. It is also a rare drop off the Crystal Butterflies in the same area, which respawn.
White Titanite Slab is found in the cave filled with Pinwheel Servants on a lootable corpse. It is also a rare drop off the Pinwheel Servants themselves.
There is an NPC, Kingseeker Frampt, that will consume your items in exchange for souls. He appears near the Firelink Shrine after you have rung the two bells. So yes, there is a way to sell item, but not until later in the game.
However, there is almost no limit to the number of items you can have in your inventory (see this question Is there a limit to the number of item in inventory?). You can hold up to 1984 different items in your inventory, and if you purchase the Bottomless Box, from a merchant in the Depth, you can store all those items in it and have a manageable inventory.
However, I think you should just drop the duplicate items because the resell value is really low. This table, from one of the Dark Souls wiki, shows how many souls you'll gain from each class of item:
Weapons 50
Armor 100
Dung Pie 200
Cracked Red Eye Orb 500
Copper Coin 1000
Some unique items 5000
Even if you resell 1000 longswords, you'll only gain 50000 souls. Compared to the time it will take you to sell all of them, and to manage your inventory, I think it is not a good trade-off. There are quicker ways farm souls.
During your second play through, reselling some of the unique items may be a cheap way to get some souls. However, reselling basic items does not seem interesting to me.
Best Answer
Run up the stairs to the left of where you enter, and follow the walkway round - you can successfully snipe him from the end of this ledge whilst dodging most of his attacks. If he does manage to hit you, drop down and run back up again to get a few more shots in. You will need to take out the dogs first though, they make this fight really annoying if you don't, given the small space you have to fight in.
Repeat till he is dead!