The Old Barbarian can be found in a clearing in the center of the wilderness map. He assigns a quest to kill a score (20) of the monsters the PC first killed. As a reward for successfully completing the quest he teaches the Courage skill. The quest is only available to non-chaotics and is not available until the PC has killed 500 monsters. Note that if the PC somehow acquires the Courage skill after the quest is assigned but before it is completed (bard class power, potion of education), returns to the Old Barbarian and 'C'hats with him, he is surprised and gives the PC an ordinary two-handed sword.
For more about strategy for the first kill, see section 0.9.1.
If the player does not care about the Courage skill, the Old Barbarian can be a source of early game experience since he can be attacked from behind water squares. There is a demo of this. This led to more problems than it solved for the demo player, because experience level 14 was reached very quickly without the time to find equipment that was appropriate for the level.
The same geographical exploit makes the Old Barbarian's Glade the ideal place to wish for an Emperor Moloch (which instead results in 25 or so Greater Molochs) for those PCs that are desperate for experience. The greater molochs should be summoned on the far right side of the map, so they will appear bunched together there. A quick teleport, and strategic use of frost bolt, frost bolt, fire bolt, will yield a perfectly safe ice island from which the PC can snipe his way to experience level 50 with ease.
Note that the Old Barbarian's glade is a decent place to store items. He is the only monster ever generated in this location, so nothing randomly generated is going to run away with the PC's stuff. If the PC leaves items far away from the Old Barbarian (or if he is dead), he will not have time to find them prior to the PC's next visit.