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The first opportunity to accept the "Kidnapped" side quest comes during the "Bowerstone Resistance" main storyline quest. This quest will be given by either Laszlo or Linda, depending on the gender of your Hero. For the sake of this guide we will use the name Laszlo, who you will encounter if you are playing as a male.
Laszlo will be seen turning away a crowd of disheartened Bowerstone citizens from his homeless shelter. The shelter is closed, possibly permanently, since Laszlo currently has far graver concerns plaguing his mind. His fiancee has been kidnapped and held for a steep ransom by a criminal named Nigel Ferret. He requests your assistance in rescuing his bride-to-be, so agree and he will lead you to an inconspicuous door across the street.
The thug inside will reluctantly let you in and lead you to a trapdoor to the Cesspools. You'll descend into a room filled to the brim with boozing mercenaries; there is also a door at the far end. Approach the door and the mercs will attack you in full force. It can be a tough battle, so use all of the tools at your disposal, namely combination magic like Blades + Fireball or Ice Storm + Fireball. Don't be shy about quaffing a Slow Time potion as well if the brawl gets too chaotic.
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Once his goons are taken care of, Nigel Ferret will open the door to his private abode. He agrees to give up the fiancee without quarrel, but confesses that she is being held in a deeper part of the sewers. Behind him is a wide opening that you need to vault down while Laszlo stays behind to keep an eye on Nigel. You'll plunge down into a pool of water and waiting on the shore is the damsel in distress.
The fiancee in question will either be a woman named Geraldine or your old flame Elise. It will only be Elise if you chose to spare her in the "Life in the Castle" main storyline quest. You must lead either Geraldine or Elise through the sewers, combating groups of Hobbes along the way. Combination magic again works best against the Hobbes who aren't particularly tough, but they have a tendency to ambush you in strong numbers.
When you reach the door just before Nigel Ferret's dwelling, Geraldine/Elise will stop you to ask you a difficult question. They want to know if you love them, and whether they should leave Laszlo for you or follow through with their original engagement. You can also choose to not say anything. This isn't a moral choice, simply a choice of preference. Respond accordingly and then make your way through the doorway.
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Upon your return you will discover Laszlo unconscious on the floor. It appears that the cowardly Nigel Ferret struck Laszlo when the opportunity arose and fled for his life. Laszlo will be very thankful to you for rescuing his fiancee, which can be awkward if you recommended that the fiancee dump Laszlo in the prior scene.
For your valiant efforts you will be awarded 30 Guild Seals to spend on the Road to Rule. Furthermore, if you recommended that the fiancee leave Laszlo for yourself, you'll be able to find and court Geraldine/Elise in Bowerstone. You'll find them walking the streets of Bowerstone Industrial a short time after "Kidnapped" is complete.