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When I finished this quest the first time I did not have Nalia in my group. When I spoke to her to get my reward I only got 254gp (felt a bit ripped).

I tried it later with her in my group and when I had finished the quest she handed over 10,254gp which felt much better, (I dropped her afterwards ...

29 yo, been rpg'ing for about 10 years, come from the land down under (Sun, Sand, Surf, Beer, Babes , prawns on the BBQ etc). Australia for those who haven't guessed.

Most enjoyable CRPG ever played, is the original pool of radiance series. Still enjoy PnP rpg'ing because of the human interaction ...

It's used to upgrade the Horn of Valhala into a more powerful form.
Spoiler....
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You find the silver horn of valhala in a house in the bridge district (NW corner). If you take it to the weapon smith in the promonade along with a diamond he will upgrade it to a more powerful type ...

Cool, Thanks for that Buck, I might do that quest next.

Do mages get a stronghold ?, I assume if they do, it would be a library or tower somewhere.

I thought that at first but I tried it with a few of my characters (including the Paladin), but still could not get it to do anything. I did not have a bard in my party, so thought it may be linked to that, being a musical type item.

Oh well it was a good way to blow 7,500 gp and a couple of gems.

I think the Diamond is faily common, i've found a couple but can't remember where.
The Beljuril is found in Umar. Just north of the village is a man standing near the crossing over the stream. Talk to him and he will offer to sell you a secret. Once you get that go speak to a farmer who is standing ...