Where he is:
Barbose occupies the fourth house in TownShip. He is located in the heart of the Great Wise Tree, Gandaroof. You'll find him in the inn of the 3rd (child) town. If the 4th house is already occupied, he won't be there.
What he does:
Barose can teach a character a spell if they meet his conditions. The spell depends on the level of his jewel. The most powerful spell he teaches is Missle. To get Missle, the character you want to learn it (my recommended candidates are Bow, Rand, Spar, and Jean -- everyone else can either learn it on their own or have no real need for it) must meet his conditions. This amounts to having one remaining hp and no remaining ap. Just keep casting till you run out to acheive the latter, and either use a Bait (can be acquired by fishing or at Daiye's fish shop) or get poisened to achieve the formor.
Once you're down tothe necesary level, have the character who has been thus reduced talk to Barbose. If AP is at 0, say "yes" to the first question. If HP is 1, say "yes" to the second question. Then say "no" when he asks if he can teach the spell. Repeat until the jewel is glowing (it goes up a level with each true "yes" answer; it'll go down if you say "yes" when you don't meet the required condition). Now that it is glowing, a character who meets Barbose's requirements can now learn Missle (uses 26 Ap, does around 140 HP on a normal hit and around 220 on a critical hit; affects all foes, best used on those weak against air based attacks).