Go west from the upper town.
Dont forget to do the small underground dungeon beneath the city. Advance the murder quest as much as you can - just follow directions and clues as they are given to you in the journal. Loot everything you can. Do all smaller quests you can find by talking to everyone - and trading with everyone.
First fight outside uppertown west gates is easy since the guards will help you. After that turn right, find a small hut with two dogs infront of it, loot - proceed bit further ahead in that direction until you hear someone from the next nearby ruin house. Escort him back to the city. Report that to the captain.
Go back to that area and find out which of the fights you can handle.
Continue.
