I used a sword with Frost on it briefly, but it made fights too easy so I went back to my previous weapon.
At least in the disk version of the game there is a way to duplicate items, which can be used before returning the sword from the stone, so you can use the sword and re-seal the ghost (if you don't mind cheating).
To copy an item; quick save the game, then drag an item out of your inventory, but not somewhere there is a red X. Without dropping first, quick load the game, then release the mouse button when it starts to load. This will produce a copy of the item on the ground, with the original still in your inventory.
There is a much easier method for items which can be stacked;
Drag a stack out of (or into) your inventory (or container) and hold down the control key before dropping. This will bring up the split stack pane; type in a negative number and hit enter (the checkmark will be greyed out). This can also be done in the trade window.
Alternately, you can wait until you have completed all the quests above ground in the Dark Forest before removing it. The ghost will not kill the elven council member, but will take out the rest of the village, as well as the merchants camped along the road near the entrance to the Dark Forest.
