WATERSIDE HOSTEL
The local inn of Nulb at #10. It's hardly the safest place to take a night's rest in, though.
One of the serving wenches, named Dala, will help herself to something carried by the party each time the party enters the tavern. The victim is allowed a Spot check to try and catch her in the act. If the Spot check succeeds, the owner, Renstch, will step in on her account. The party can get Renstch to back off through Diplomacy, Intimidation, or groveling for their lives.
Wat and Renstch both have secret ties to the Temple of Elemental Evil, but each is tied to different and rival factions within the Temple.
To get it going with Wat, a character has to Bluff him into believing that the party wasn't responsible for the routing of the Moathouse. After that, Wat will extend the invitation to join the Temple.
Where Rentsch is concerned, a Gather Information check allows the character to discover that he participated in the Battle of Emridy Meadows on behalf of the Temple. The character then needs a sufficient Diplomacy skill to convince Rentsch to sign the party up. Sometimes a character will have a good Gather Information rank, but not quite as good a Diplomacy rank, or vice versa. Casting Eagle's Splendour on the character should suffice.
The implication here is that the party may be able to progress through some parts of the Temple without having to resort to combat.
A character can try hitting on the serving wench named Pearl. She suspects that her lover, Wat, is cheating on her with Alira.
Talk to Alira. She claims that all she's doing is making regular sales of liquor to Wat. Confirm this with Wat. Then break the news to Pearl for an experience point reward.
Alira is an agent for the Temple of Elemental Evil. There are two ways to obtain the location of the Temple from her. One is for a character with a sufficient Sleight of Hand skill to pickpocket the map from her. The other is to Intimidate her into revealing the location of the map.
Wat and Renstch are both recruiting agents for different factions of the Temple of Elemental Evil. But neither knows the truth about the other. As such, you can initiate dialogues to place them in direct conflict with each other. You can convince Wat that Rentsch has been reporting to the Council in Hommlet. You can then convince Rentsch that Wat is an agent of Furyondy. You can then seal the deal by convincing Wat that Rentsch knows the truth about him. This prompts Wat to have Rentsch taken care of. The quest is complete at this point. However, you can speak to Rentsch about Wat again. Rentsch will similarly express a desire to have things taken care of. Note that you need to have a pretty high Bluff skill to pull off these dialogues.
Note that Wat will end up topsides down the road, and this may prove significant if you're looking into certain quests in the Temple of Elemental Evil.
A character with a good enough Sleight of Hand skill can also pickpocket Rentsch for his key. The key is to a chest located near the north corner of the Waterside Hostel. Inside you'll find a fair bit of coin.