[Aerich]

@ Spiff,
Yep, killin' 99% of everything in your way is the point of the game (ain't it fun?). Definitely all kinds of great loot in the Severed Hand. In comparison with Dragon's Eye (on the availability of magical items), it's like the sultan's treasure room vs. the desert.

I'd have to agree with Micah on this one. Keep the paladin. It does a lot of things well, which is its strength. Decent healer, decent tank, decent undead turning. The benefit of a paladin over a dual or multi-class F/C is the comparative speed with which it goes up levels + the ability to use swords. It will probably be a better undead turner than a F/C for quite a while. As I see it, dualing your existing F to C earlier (for more clerical spells) should enable you to keep the pally with no worries (although the idea of two fighter-druids *is* toothsome). It also seems like a waste to get a character all the way into the Severed Hand then turf him like a weak link. I don't generally dual after lvl 9, because I like to regain my previous skills sooner rather than later. I know there's lots of people out there who like to make dual-class F/whatever that are lvl 29/30. I personally prefer to be able to access all of my characters' skills for as much of the game as I can, balancing that consideration against the improved Thac0 and HP that comes from dualling later.

Seriously, I would keep the paladin. A fighter-type with minor clerical powers (for not much of an experience hit) is great. One thing you could do is memorize strictly combat-application spells with him; use Command or Hold Person to debilitate enemy archers and spellcasters (then run over and chop them down at close range), use Bless before combat, Magical Stone against undead, and most importantly DRAW UPON HOLY MIGHT! A 9th level paladin using that spell has his Str, Dex and Con raised by three each! To make your pally into the fighter of doom, drink a potion of Str, a potion of Dex (or cast Cat's Grace) and possibly a potion of fortitude (if Con isn't already 18). *Then* cast Draw Upon Holy Might, haste that pally, and watch him work...

With reference to dialogue options and weapons:

SPOILERS AHEAD
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1) Kuldahar
if you talk to the people of Kuldahar before finishing the Vale of Shadows with a paladin or cleric, sometimes they tell you about Kresselack. After the whole rigamarole of every single person being afraid of you (you'd think everyone would know that there are strangers in town, all they seem to do is stand around and talk), a cleric can ask about Kresselack's priests and identify them as Bonedancers. A pally can talk about Kresselack's leadership and find out about his sword. Both options give a garnet, which is good money for that stage of the game. *Note: try each villager twice. Sometimes they don't give you the Kresselack dialogue option on the first try. I've received as many as ten garnets in total.

2) Vale of Shadows
Talk to Mytos (the Bonedancer priest on first level of Kresselack's tomb) with the paladin and get talking philosophically about necromancy. It gives a bit of extra experience, which is nice.

3) Frost Giant Lair
BIG EXPERIENCE. Talk to Joril with the paladin: it will give you the option of demanding that he release the prisoners. Take that option, as I believe it is worth 6 digit XP! (Around 140-180 thousand, iirc)

4) Lower Dorn's Deep (Bard dialogue)
In the garden, talk to the gnome that is working on a statue. Get the portrait, and enter Marketh's palace. Once you enter, go forward and take out the thieves, but don't enter any rooms yet. At the very end of the hall (across from the staircase leading to the next floor) is a room containing the more scholarly henchman of Marketh (iirc, his name is Floozum). Use the bard, commiserate with him, and suggest that he could be a bard. He will drop all his gear and leave without a fight, also giving you some hefty quest experience. *Note, he will be automatically hostile if you kill his brother before speaking to him (his brother is in the first room past the entrance).

5) Lower Dorn's (AKA the reason to take a paladin)
In Malavon's area (with umber hulks and blind minotaurs) you can (always) find the Pale Justice, a paladin-specific longsword that is the best sword in the game. It gives immunity to charm and fear spells, but more importantly is +7 to attack and damage against evil creatures.

End result: many good reasons to keep a paladin, and many ways to make him (or her) more effective. But do what you feel like doing. There are really no bad classes or class combinations (reserving judgment on the single-class thief), you just have to be willing to give them some levels, minimize their weaknesses and experiment with tactics.