Lady Curse is an NPC shop with the ability to Curse items. Cursing an item gives it additional effects that it didn't have before, but also gives additional negative effects - for example negative regeneration. She is in the lower area of Kalm, below the teleporter.
How to UseEdit
First, you must complete Annoying Monster (quest) and turn in the Important Thing. She should then sell many Curse items for one Crystal Shard. To curse an item, first get the base item (for example, Barbarian's Helmet), then obtain the Cursing Scroll and use it with the item in your inventory. It should transform it into a new item.