Continue after defeating the first evil king (the rat). Then defeat the second evil king (the fish-like creature), and then return to the place where the first evil king was located, in the sewer. You should see see bars
that resemble those in a jail cell. Approach them and wait.A ghost should then come after you. Let it get you for very good experience. The save and healer will also be nearby.
In Tenel, go to the blacksmith's shop and talk to him. He will give you a Fruit Knife. Go to Madril and enter the shop. Talk to the kid at the counter. He will offer you 300 Sukel for the knife. Do not accept his offer, and tell him that you will think about it. Start a new conversation with him and he will offer you 400 Sukel, which you can accept.
When you get a new sword, sell your other weaker swords.
When you get though the Aquatic Ruins, you can keep returning to fight the earns to get more Sukel and experience.
Sword Of Gear:
Tiny gears are scattered all over the world on the ground. You cannot see them, but if you go near them you will automatically pick them up. If you get 30 of the 32 tiny gears and return to the house on the snow plain with a big snowman in front of it, the man inside will give you the "Sword of Gear". It has Attack +50 and Defense +10. If you keep talking to that man after you get the sword, he will tell you about the Turtle and the Pebble.
Finding the princess:
After the princess runs away, you can find her at your house in Tenel.
Finding the escapeless abyss:
It is located in the Rumille Plains. You will see a
sign that reads "The Escapeless Abyss". It is inside a strange dark cave.