When you first encounter this Goat Man, you probably won't even realize that Gharbad is part of a quest, and you'll likely try to attack him. You can't hurt him, so once you clear out any monsters near him, click on him to initiate a conversation. He'll plead with you not to kill him; you can't anyway, so leave the room. You'll have to leave and return to the room several times in order to complete this quest, but there is no time limit, so you can explore at your leisure and return when you want. The first time you return he will give you a magic item, which may or may not be useful to you. The second time you return he will tell you that he isn't quite finished making you another item. Finally, the third time you return, Gharbad will decide that the item he has made is (too good for you) and he'll attack immediately. Gharbad the Weak lives up to his name, however, so you shouldn't have much difficulty killing him in any number of imaginative ways. You'll receive the item he made once you kill him.
Just poor old Gharbad (unless you haven't cleared out the monsters on the fourth level near him)
A magic item from Gharbad the second time you speak to him and an additional magic item from his remains