I will try to explain quickly, and to the point...
1) Talk to the street girl, and she will mention that she remembers a strange smell near the murder scene. You also will talk to a beggar and he will offer to sell you some exotic hide that he found near the site.
2) Buy three items from the vendor near the hooker chick, which is bark, berries, and something else.
3) give these to the hooker to smell.
4) she will recognize the smell, and point you to the murderer.
5) go to his house and kick some ass...
6) report to the guard who met you at the beginning to be on the look out.
I hope that answer is acceptable..and notice that I did not give much away??
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