Spoilers
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Ilyich is in the Irenicus Dungeon at the beginning of the game. He is camped out in the large store room past the library.
In an unmodified game, Ilyich is not worth mention. You kill him, quickly, and take the Dryad's useless Acorns from him.
BUT
If you download the tactics mod, improved Ilyich allegedly becomes one of the toughest in the game - and the Acorns become worth stealing - even from the Dryads (according to a currently active post).
I cannot speak from personal experience, as I discovered the tactics mod after I climbed out of the personal hell that is Irenicus' dungeon, though I look forward to tackling it on my next solo attempt.
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This is going to be a short trip...
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