Hmmm... I've never tried equipping that before.
Things I'd try (and you may have, but let's spell 'em out):
1. Go to the temple and select "uncurse". An afflicted character image should show up in the display
2. Go to the quest-giver (Miruth?) to see if he recognizes the quest as being complete. If he does, he should take the dagger.
3. Try casting Exorcism at full blast on the cursed character. That may remove it.
In all cases, make sure you have an available inventory spot for the Fang. Nothing worse than just losing it 'cause you had no inventory room
And if worst comes to worst, you can consider hacking the game to remove it. That may be a bit involved, not to mention unproven, so a better solution may be to use the reverse time spell and reload a save from prior to equipping it.
You do have old saves, don't you? Remember the Gael Serran motto:
Save early, save often
save before, save after
Let us know...