I quickly learned what "Revert Game" meant on my first playthrough (long before I found this forum) when I first discovered the meaning of "Mantrap"....grrrrr!
As Slug says, it's in the Inn screen. It will take you back to where you were when last you left town, rather than start the entire game over again. You still lose some time, but it's better than not having it at all.
I had a problem on one of my playthroughs with the Ghost of Gliebott not showing up, even though I had accepted the quest. So I had to "Revert Game" and start Shurugeon again, even though I had gotten a Nightblade(!) from the undead armorer in the first time through (wasn't there the 2nd time
but Gliebott was!)
So, it can help you out of a jam. Bad thing is, you may lose some cool stuff (like I did with the Nightblade.)
-Sazerac