These two go together fairly well, and in fact have to be done at roughly the same time. It's not a bad way to get a little bit of money and a chance to kill some old enemies. Those with more mercenary attitudes can get
You can start this quest by going to the harbor. Walk along the docks and look for a man leaning against a wall. You can find him by going out the exit on the right of the inn, walking down the ramp and then following the water level dock. Keep an eye out for a dot on the map. He'll call out to you and mention a possible job for you. This is fairly simple, or so it at least seems. There's a dangerous incense being sold to people in the town, and he'd like to check the formula of it to be sure. There's a fair amount of money in it for us if we help too.
The Incense Shop
This shouldn't be too hard for Geralt. The shop that he's talking about is just off of the town square, to the left of the scaffolds. As you approach, you should really note the group of four people standing outside of the incense shop. Talk to the woman in front, Matilda Szabo, to learn that they're actually protesting the very same thing that we're trying to acquire. It seems that this “dangerous" incense is less dangerous, and much more like fisstech. Our friend may have lied to us, it seems. I wonder what foreigns have a strong interest in fisstech?
Go up to the shop in the wall, and buy anything that you want from him now. We're going to close his shop down, so this is the last chance to get anything. Talk to him about the formula, and he'll offer to give you a fake one that's very similar. You can choose to intimidate him into giving you the real thing, or agree to try the fake one. It's honestly your call, since it doesn't necessarily affect the outcome, unless you want to legitimately complete the deal and just collect the money.
Once this is done, you'll want to ask him about the incense being used as fisstech. He'll evade at first, but with the use of signs and persuasion, you can get him to tell the truth, and agree to shut down his shop for the good of the neighborhood (or out of fear of Loredo).
The reason it's a good idea to do these at the same time is due to a lockout issue. Doing one before the other cancels a quest. Doing them at the same time saves a bit of trouble, and effectively nets you some free orens.
Talk to Matilda at the head of the crowd and report your success. You'll receive a handful of orens as your reward.
With your formula in hand, go down to the docks and talk to your contact again. He'll agree to meet you at the edge of the town by Lobinden, and set out for their hidden lab. Just move on up and find him. He'll want to take you there in a blindfold. If you refuse, he'll eventually give in and just mark it on your map. It doesn't matter much, unless you just care about roleplaying, or if you want a chance to prepare before the fight (if there's going to be one). It's up to you.
Go over to the cave and find the group of men inside. It should be fairly obvious that they're not real alchemists at this point. If you give him the real formula, and then agree to the sale, he'll just pay you and you'll be free to go. If you choose to not give the real formula to him, you should be able to leave, with just an exchange of threats and a future ambush in town.
The fake one is the fun one though. They will reveal themselves to be Salamandra, and try to kill you. A simple band of bandits isn't a really big issue though. Just leap out of the way, and hit a few a few of the big guys at the start to clear the field a bit. Just keep your parry and Quen up, and you should actually be fine. Feel free to use some poison on your blade if you're having trouble. Hanged Man's Venom would help a bit.
Once the first few big guys without shields are down, you should have plenty of room to leap around and thin the force down to nothing. Feel free to be aggressive and keep them stunned.
All information and screenshots from a "normal" difficulty playthrough of Witcher 2
Due to the branching nature of the game, your experience may differ. Please feel free to comment on any differences that you notice in the comments below.