Valium Duskflower is the ghost of an Elf whose village was destroyed by Angelo's kids. Since then he can't rest peacefully, and has dedicated himself to tell his epic story of what happened to his town.
Julie's group crossed paths with him when he possessed Lenny while Lenny was hunting for the group's dinner. Through the possession he lead Julie's group to the destroyed town. A group of followers of Tlodnal happened to also be in the area, intent on raising the dead in the town as zombies.
With Valium's help Julie's group drove the evil gang off, but at great cost. Due to Valium's meddling in Julie's travels, it cost Angelika her life.
Valium decided to tag along with the group afterword, whether they wanted him or not. Perhaps he desired to set things right in helping to bring Angelika back to life, or maybe was was bored of drifting about a ruined town.
He went with Julie's gang to Malali, a small town on Sol Danja Island thanks to Jordie's parents teleportation. There he found out Jordie's parents are in with the Empire, and he wanted revenge for his town's destruction. He was unfortunately destroyed by Angelo, but ghosts don't get destroyed so easily. Perhaps he regenerated back at the town.
Valium as a person is friendly enough, but has a bit of ego and ham. He's free spirited and energetic, much to the annoyance of Julie's group...especially Rocky and Angelika. They did grow to like him, and were sad upon learning of his destruction.