Sounds like George in the town you start in (Aleroth) you're talking about, not Geoff (In Ars Magicana of Rivertown).
As for breaking your game, you just broke a small side-quest. There will be other merchants with much better equipment, potions, etc. Also, George would have eventually stopped trading with you anyways. (And you still should be able to find and complete the quest to find out about that)
Might be a bit harder, but bear in mind you should still be able to trade with the various healers of Aleroth by clicking the "Trade" button when you're talking with them. I'm unsure if any of them can repair your equipment.
Also, welcome to the forums. <img src="/ubbthreads/images/graemlins/wave.gif" alt="" />
