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A Witch's Advice
You need to go ahead and talk to the Reverend. He wants more action on the Beast before he'll commit, so you should talk to Abigail. Her house is over by the inn in an abandoned village. You have probably been there already. Regardless, head over and ask about Alvin. She should mention that she needs 5 white myrtle flowers for a little ritual to find out more about the beast.
You have 2 choices for this one. The white myrtle bushes are easy to find. They are large with white flowers. The problem is that you'll need the Herbalism talent from the Intelligence string and you will need to read an expensive book from Abigail. You should probably get it anyway, since collecting herbs is a great talent. You can also use this time to wrap up any of the remaining quests. The white myrtle bushes are spread out, so your best bet is to just run around doing side quests and collect them as you go.
You can also just buy 5 flowers from the Herbalist at the Inn. He's standing outside wearing fancy clothes.
Regardless, go back to Abigail and give her the 5 flowers. She'll start brewing the potion. You can visit her a little later once it's done. If you want, you can also just meditate in her house for awhile. It shouldn't take more than a few hours to complete the potion. Listen to Alvin and then report to the Reverend. Also remember to read Berengar's Notes. Abigail will give you a copy for free.
* Note - Buy some spectre's oil from Abigail. It doesn't cost much and it will come in really handy against The Beast.
*Important Note - Once you give Abigail the white myrtle flowers, you should just go around and complete all of the side quests that you want to do. After you receive the prophesy from Alvin and talk to the Reverend, Act 1 locks up. You will not be able to complete the majority of the quests and the outskirts are locked up after you leave at the end. So...take care of things now and don't ask the Reverend about where the beast comes from until you are sure that you're done.
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The Salamander's Tail
The Reverend has decided on a separate course of action for the Beast. For now, we have to take care of the Salamandra. Salamandra have attacked the inn. Rush over and storm the Inn. Everyone should be gone already. Go inside and challenge the few Salamandra here. Defend Shani and help her kill them all. They shouldn't be too tough. Group style still works well in here. Once the group is dead, search the inn for the dead innkeeper. Grab the key off of his body.
You now have to storm their actual hideout. 2 Salamandra are guarding a marked abandoned house. Go over and kill them. Go ahead inside and kill another 4 Salamandra inside. Group style should make short work of them in this tight environment. Go ahead and wait a minute for Geralt to recover. There's another fight coming up and you should be ready for it. Try to save too.
There's a trapdoor in the corner of the room. Try to go down it to notice that Haren has apparently been trading with the Salamandra. Try again to drop down into their real hideout. There's another group down here. No real trick to this one. Kill them all with whatever fighting style you want. Group works well, signs work well, fast/strong work well. You should know how to fight these guys by now.
Once they're all dead, you should spot Alvin down in the caves. It looks like this was the Reverend's plan for killing The Beast. Alvin and some other children are apparently slaves for the moment. Geralt just freed them though. Gather some herbs in the cave and wait a minute for Geralt to recover. There's no real rush. When you're ready, follow Alvin to the back and use Aard to blow away the rocks. It looks like our old friend Abigail is here brewing another potion.
Talk to Abigail to get your situation report. If you want, you can agree to fool around a bit to gain an incredibly disturbing sex card. When you've made your decision, try to walk out.
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This is the big decision for Act 1. You can either defend her or let the Reverend and his mob lynch her. It's all your call. I'll note that this really should be a fairly hard decision from a role playing status. The results are basically six of one and half a dozen of the other. It should boil down to how you're playing Geralt. The townspeople have done horrible things. Abigail is an amoral witch with a voodoo doll of Odo in her house. The game hints that Abigail was really innocent later on, but it's still your call.
I'll add that this decision also has some story effects in Act 4, Act 5, and the Epilogue. Those are more "reflections on my acts" though, so don't worry about them now. They make no material difference to the game.
Saving Abigail - You think that Abigail's innocent. Just follow the conversation paths that declare her so. Point out the Odo must have murdered his brother in his sleep (not in the fields like he says), that Haren is trading with child slavers, and that some bandits and Mikul raped Isla. You can also call out the Reverend for protecting Salamandra.
You'll walk away with Abigail and face off against the beast. She'll offer her help, which isn't actually that much. After you kill The Beast, then you have to fight the Reverend and his mob to save Abigail. They actually aren't too tough, unless you were really hurt already. I'll cover that below though. You'll take the letter of safe conduct from his body.
Leave Abigail to Her Fate - You can proclaim her guilty and let the Reverend kill her. There's not much more to it than that. The villagers will then join in your fight against the Beast, but they usually just die quickly. Once you're done with the battle, the Reverend will hand you the letter of safe conduct.
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Killing the Beast
Regardless of your choice, you will end up facing The Beast in a circle of fire. Some people find this battle tough, especially if they haven't prepared for it. There's just one question though. Did you buy the specter oil? If no, then why not? It's actually painfully easy if you bought the specter oil like I told you to do. Just put some on your blade and the beast will die after a few strong style combos.
If you didn't do that and you don't want to replay about a half hour of gameplay, then see if you still have any potions in your bag that will increase your parry, dodge, or attack. Take a few of those. You won't need them again for awhile. If all else fails, you can just take a few Swallow potions and pray that the random number generator is kind to you.
The actual flow of the fight is simple. Use group style to thin out the original horde of barghests that The Beast spawns. Once they're thinned out, just focus on him and keep hammering away with strong style. He should die pretty quickly. If you have the specter oil on your blade, then it goes even quicker.
If you protected Abigail, then you'll also have to fight the Reverend and his mob. Just switch to group style to tear through the nameless villagers and Odo. Then just hammer away at the fairly weak Haren and the Reverend. Once the mob is dead, just take a moment and loot all the bodies. They have a good bit of gold and the Reverend has the letter of safe conduct that you need.
There's nothing else that you can do here. The Beast killed most of the town and everyone else is hiding. Go back to the inn and talk to Shani. Take her along with you through the ruins of the outskirts and report in to Mikul at the Mill Gate. It seems like your entry into town won't go as planned though.