As you travel along the road, you should meet up with two men - Montaron
and Xzar. These characters are evilly aligned, but even if you are
not evil, you can presently do with all the help you can get, so ask them
to join and keep moving along.(You must make sure that you do go to Nashkel
within a reasonable amount of time, otherwise they will get angry and leave)
Stick to the road, and after you change maps an old man will speak to you.
["Cheat item" #1 may be found on this map. Location of cheat
items can be found here]
Follow his instructions - stick to the road, heading east and
then north until you switch maps to the Friendly Arm Inn. (FAI)
After the cut-scene, head north into the inn proper. After you
pass under the gate, head northeast, until you hit the central building.
Follow the wall around east to the stairs.
If Tarnesh manages to kill you, and you haven't saved, simply load
up from the autosave slot and go to the FAI again, saving just before you
get to Tarnesh. If you have trouble with Tarnesh, try heading back
down the stairs to fight - as then the guards will help you kill him.
Tarnesh has gold, a staff, a bounty notice, and three scrolls: armor,
burning hands and magic missile.
Head into the Inn itself, and have a wander around. Talk to Khalid
and Jaheira, and have them join your party. Khalid & Jaheira
and Xzar & Montaron do not get along, but they will work together for
quite a while.(But they will eventually end up attacking one another)
You will probably want to adjust Jaheira spells to healing and one entangle.
Head upstairs, and on the second floor you can find Unshey. She
will ask you to return a girdle than an ogre stole off her.
On the third floor is Landrin, who will ask you to rid her house in Beregost of some spiders, and if you are charismatic enough, she will give you six antidotes. She asks for a bottle of wine, a pair of boots and a spider's body. There is also a nobleman on this floor who will ask you to launder his golden pantaloons, he will also give you gold if you have a high charisma(sometimes). Take them, then talk to him again for some exp.
After resting, go out of the inn, and head into the house just near the large gate that is the main entrance to the inn. Joia will ask that you return her flamedance ring. Head out of the inn, and explore the rest of the map. You should find several hobgoblins, and one of them will have the ring. Go talk again to Joia for exp and a reputation increase.
If you are injured, heal up and rest, then head to the tile just south of the FAI. The ogre with Unshey's girdle is on this tile, along the center of the eastern edge. The ogre has two girdles, one is the one that Unshey wanted, the other is cursed and changes the gender of the person wearing it. Returning the girdle will give you gold and exp(and possibly a book if your charisma is high). There are various other monsters around this tile, so save frequently, and head back to the FAI to rest whenever you need to.
After you have cleared out this tile, head south down to Beregost. Go south and then east to find Garrick. Talk to him and take the job. Talk to Silke, and then either obey or ignore her orders. Note that regardless, both Silke and the men can be killed without a reputation decrease. However, if you do kill the men, then Garrick will not join your party(No great loss, IMO).
Go into the Red Sheaf, and another assassin will attack. If you talk to Perdue (Gnoll is the correct animal), he will ask you to fetch a sword for you. If you head off the west side of the map, and head to high hedge, you will find the gnoll on the south east side of High Hedge, which is in the centre of the map. If you follow the path, then you will meet up with Kivan, a Chaotic Good ranger. You can go into High Hedge if you want, but make sure you talk to Thalantyr pretty quickly, and you probably won't be able to afford a lot of items he has - but he is useful to purchase spells.
You can also enter the Burning Wizard and talk to Zhurlong, who will ask you to fetch his boots of stealth for him - and steal money from you in the process. He will steal more money from you every time you talk to him, but when you return his boots for him(the hobgoblins are on the west side of the map just to the south), he will give you all the money he has stolen and then 100gp extra. But you will permanently lose any money he steals from you after that.(Unless you kill him of course) Near the area where you find the hobgoblins, you should find a rock face with a cave in it. If you go in and look in the crate, then you will find several healing potions.
On the east side of Beregost is a house in which Mirianne lives. She will ask you to find out about her husband, which you can do quite easily by following the road south on the tile south of Beregost. Return back to her to get a ring of protection +1.
If you head into Feldepost's Inn, Marl will try to fight you. If you manage to say the right things(Don't offer to buy him a drink - at first), you will earn a tidy amount of exp. Feldepost's Inn & the Smithy have some good magical items, but you probably won't be able to afford them. However - if you head to the Smithy at night(NOT during the day), then if you manage to break into the chest at the back of the room, you will net yourself some swords - including a +1 bastard sword.
If you enter the building adjacent to the north edge of Feldepost's Inn, you can meet Kagain, a Lawful Evil dwarf fighter(who is a bit lacking for a fighter in the strength department). {But he does have a cool helmet, and can regenerate HP.}
Break into the large house at the north of Beregost, and head upstairs. Break into the chest, and you should net yourself a few good items - including a wand of lightning! Remember that wands only have a limited number of charges, and this wand of lighting is very useful near the end of chapter 3.
There are a few other quests that start in Beregost, but they are too difficult at this stage. So, just keep heading south until you get to Nashkel. This will put you into chapter 2.