QUOTE(mALX @ Dec 25 2010, 10:34 AM)

1. Your Journal will tell you to take it to the Castle and turn it in, ignore that, the reward you get isn't worth losing that sword.
I gotta say that this is debatable, Malx. In fact, at high-level gameplay, it's far, far better to turn the sword over for the castle's reward.
Depending on the level you're at, getting the Escutcheon of Chorrol (the reward for turning the Honorblade in to the Chorrol Castle Steward Laythe Wavrick) is one of the best items in the game. At level 25 or above, the shield comes with a 35% Reflect Damage enchantment, and it is absolutely required to become immune to all melee attacks (not counting weapon enchantments). The shield also fortifies Endurance by ten points, which is the nice equivalent of a 20-point boost in health whenever it's equipped.
The next-best item in terms of damage-reduction is probably a Perfect Madness Shield or Perfect Amber Shield from the Shivering Isles expansion, with a 10% Reflect Damage enchantment. Unless utilizing mods or making changes in the Construction Set, Reflect Damage is not available as a custom enchantment. Additionally, the Perfect Madness Shield only provides 1.25 extra points of baseline armor rating.
Unless one has low skill in Heavy Armor, the statistical reductions in damage are greater for the Escutcheon of Chorrol than any other item in the game. With the ease of acquiring game-breaker swords with custom enchantments (elemental damage, weakness to elements, weakness to magic, and soul trap for 1-second duration stacked onto a single weapon) stacking enchantment damage can do thousands of points of damage in a single second.