You get more experience and reputation for saving both men, obviously, but no other quests are broken for letting one of them die. If I had to choose, though, I would have saved Verlat, since, as mentioned, you run into him later in Verdistis and he has a nice gift to express his thanks. You never see Simon again. Either way, it's just a side quest.
Glad you like the game. It is quite spellbinding.