Duplicate auxiliary verbs in a sentence (may we / should we delete the second?)

In this sentence, is is the main verb in the first part, and is the auxiliary verb in the second part. This makes deleting the second is ungrammatical. So you have two options:

It is available for every item and is used with …
It is available for every item and it is used with …

If is is the main verb in both parts, or the auxiliary verb in both parts, you can (optionally) delete its second use:

It is available for every item and ready to use with no complicated set-up.
It is packaged with every item and used with …

The same rule applies to has; don't delete the second usage if it plays two different grammatical roles (i.e., main verb and auxiliary verb):

*It has deadly venom and killed countless people. (Wrong)
It has deadly venom and has killed countless people. (Correct)

ADDED: From the comments, some people perceive that in the OP's sentence, used is a past participle that is close enough to an adjective that is can be deleted. I perceive deleting it as ungrammatical.

There are three possible uses for to be as a verb form: an auxiliary verb signalling the passive voice, an auxiliary verb signalling a continuous tense, and the main verb. I don't believe you can use ellipsis if the verb plays two of these different roles. Consider the following sentences, all of which I perceive as ungrammatical:

*He was incompetent and embezzling.
*He was incompetent and fired for that reason.
*He was embezzling and fired for that reason.

On the other hand, both the past participle and present participle can function as adjectives, and in this case you can use ellipsis to delete the verb. For example, I don't feel that there is anything wrong with the following sentence:

The child was tired, hungry, and crying.