WHAT DOES IT DO??? I can't figure it out

Eidan's Ring doesn't really do anything. It is used to get the inkeeper (Aldwin) to lower his room prices. Talk to the barmaid, not Lysan the other one and she will tell you about the mysterious circumstances of Aldwin's acquisition of the Kulduhar Inn. When you have the ring confront him and he will agree to lower his prices. This gives the party a little more experience points. Hope this helps you.