To activate the sword you must read the books in a certain order. Go to the book furtherst from the door and read each in turn from left to right. You should be informed of a noise occuring across the hall, go to that room and the Sword will thank you, go to the Dwarf who asked you for Pride he will disappear on completion.
If you have already read all the books but not in the required order I don't know if the quest can be completed. Maybe it can, maybe it can't, but the required order is the one I gave you above. To accurately locate the order of books, go across the hall to where the sword is, locate the closest book to that, trace the books back to the left until you find the first and read each in turn them left to right.
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