Slane is a bit of an odd one. I can't think of another NPC that you don't want to kill that gives you so much more XP (and rewards) for doing so. I do always kill him and always feel mildly dirty for doing so. Perhaps I shouldn't.
Anyway it doesn't much matter what you do in Act 1. As soon as you get to Act 2 what you did (and how much XP you got) in Act 1 doesn't really make any difference as the numbers get so much bigger. It is like starting again really.
