That dagger is fantastic, though. With a dual weilder, and Smithing, it's not technically enchanted, so you can get decent damage out of it, accellerate your main weapon (Like an axe) and still pop off crits with it like a Sword, but without spending any Perks. And finally, it either works with Elemental Fury, or you can double enchant it with Extra Effect, and it retains the crit chance. Just plain awesome if you know how to use it. (Especially with Windshear, which isn't technically Enchanted, either.) Also, with Assassin's Blade, it can Crit on top of the massive Backstab multiplier.
And no, I've never been able to find him in Falkreath, except by following him back. Even then, he doesn't say anything different (Repeats the same "If you're ever in Falkreath" line, in Falkreath) and dissapears forever as soon as you turn your back, or step inside the Deadman's Drink. I'd take him as a follower with a quickness, or even marry him.