Prince Helseth's Blackmail Scam
You must be at least 4th level to be offered this quest. Unless you're psychic, you'll have to go talk to Helseth to get this quest. There is supposed to be a letter delivered to you, but it never shows up in your inventory. About the only clue you get is a courier from Wayrest delivering something. This happens along about 3rd or 4th level.
Wayrest Grand Hall
Prince Helseth (that's him with his feet on the table) wants a letter delivered to Lord Castellian. He'll give you the letter and your instructions the day after he offers you the quest, so be on time. Helseth has found out about some "indiscretions" involving Lord Castellian and a noble lady with a jealous husband. He wants to reach an accommodation with Castellian, who is the most influential of Wayrest's counselors and has the backing to block Helseth's plans (whatever they may be).
If you choose to deliver the letter without reading it you'll be rewarded as promised with a piece of enchanted something or other or a magic item and the information that Wayrest had sent counselors to meet with Lysandus the night before he was killed. Your rep will increase with the nobility and people of Wayrest, including Lord Castellian (go figure -- you help blackmail him and he likes you even more).
If you choose to deliver the letter, but read it, you'll get to fight a few guards (knights and a couple of Battlemages). Helseth will still give you the armor and the information. Your rep in Wayrest, however, will take a nosedive. If you're going to read the letter, you'd better turn it over to someone besides Lord Castellian.
If you read the letter and then turn it over to King Eadwyre, your reputation with the Court and nobility in Wayrest will soar, +15 to +20 points at the upper end, with a commensurate increase for those factions allied with the various nobles in Wayrest. The only apparent negative consequence are that Queen Barenziah will not offer you her quest (which is also an optional quest), your rep with Helseth will drop by a few points and he won't give you the information he promised.
I've tried, without success, to turn the letter over to the various nobles at Wayrest and at Sentinel. Barenziah won't take it and Morgiah won't even speak to me. Elysana tries to offer the quest to deliver the robe to Lord Castellian (which makes for some interesting responses when you're asking around since Lord Castellian appears on your list twice and each one elicits different responses). Fast-traveling to Sentinel or Daggerfall in order to turn the letter over to nobles at those locations (who won't take it, by the way) has a couple of interesting consequences. First, the cost of the trip jumps to over 4 billion GP's if you want to make it before the deadline. Second, when you arrive, you'll find that all of your letters of credit have been converted to cash.
The quest itself is easy enough. Collect the letter from Helseth, take it to Lord Castellian (he's in a house in a town somewhere in Wayrest province), get Castellian's reply and deliver it to Helseth. Easily completed in 2 or 3 minutes (real time).