Necrovarus is a ghostly priest and mage, as well as the creator of the Ectofuntus. He arrived in Port Phasmatys from the Eastern Lands.
Necrovarus is heavily involved with the Ghosts Ahoy quest. When the people of Port Phasmatys were alive, he offered to help save them when Lord Drakan began forcing the port's residents to pay blood tithes. Necrovarus caused the Ectofuntus to be built, which created a magical barrier around the town, which Drakan and his Vampyres were unable to cross, keeping them at bay.
Although the Ectofuntus worked perfectly, it had a terrible side-effect; the townspeople gradually lost the will to live, and all of them eventually died - even Necrovarus himself perished in the end. The townspeople became ghosts and found themselves unable to pass into the afterlife, trapped by the Ectofuntus' power. This was the true intention of Necrovarus, who intended to use power of the ghosts and the Ectofuntus for his own evil purposes (Necrovarus himself seems to have died when the Ectofuntus was built, but this in effect conferred a form of immortality on him without stopping his worldly ambitions).
During the Ghosts Ahoy quest, players are tasked with forcing Necrovarus to allow the townspeople to enter the afterlife, eventually forcing him to do so with an enchanted ghostspeak amulet, setting the ghosts free. They can now move on to the next world if they wish, although most have chosen to remain in this world at Port Phasmatys for the time being.
In the Ghosts Ahoy quest, when using an enchanted ghost speak amulet you can command Necrovarus to do an impression of a chicken without discharging the amulet. In his impression he says "Cluck cluck squuuaaaakkkk cluck cluck" then "I think I've laid an egg...".
Also using this amulet you can convince him to tell you a joke without discharging the amulet. The joke he replies is "Knock Knock, Who's there, Egbert, Egbert who?, Egbert no bacon".
Necrovarus' name comes from the Greek prefix necro, meaning dead, and indeed may be a play on necrovirus.