Question 1: Is it number all Items in system?? Or Just number of rated items by
user??
Answer 1: Neither
If you see this formula:

in the denominator you need to calculate the rooted sum for each Rating of user u for item i minus the average rating of this User (mean rating) and this subtraction is squared then it is the same thing for item j which you have to multiply together.
Question 2: is there a function in MatLab for Adjusted Cosine?
Answer 2: By default no. But it should be relatively easy to write it your self given that you have the formula.