Yes, Jan is damn good, and no, I've never seen the second part of that quest.
If you finish making that sickly human flesh armour, that's it. The guy leaves, and you've got yourself some new (albeit really foul) armour. The Twisted Rune meeting hall is somewhere in the Bridge district, incidentally, and you can go there and slaughter its members to your heart's content. I never figured out the ins and outs of this whole thing. It seems like it's split into two parts or something.
And yes, using cheat editors to give your group all the good items is pretty stupid. Most of the talk about using cheat editors on this board, though, is just to fix all the unfortunate bugs Black Isle forgot to take out before the final cut - items disappearing, NPCs disappearing, and such.
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