If you can retrieve it for her, she will use its magic to strengthen your weapons. The Malus is guarded by the Smith.
To get it
When you get near the Barracks, Charsi will be activated to ask you to retrieve a smithing hammer she had to leave in the Monastery when they fled the sudden invasion of demons lead by Andariel. You need to find the inner room (in a random location each game) of the Barracks level (first level inside the Monastery) with the forge and the hammer on a stand.
It is guarded by the Smith, a large boss monster reminiscent of the Butcher from Diablo I. He will pursue you at a high rate of speed and is a pretty nasty fight. He hits very hard and has a lot of hit points. You however do not need to kill him, you can just dodge around him and grab it from the stand. Once you return to town and click on Charsi she'll claim the hammer, even if you have it in your stash.
For more information on how to use this imbue as efficiently as possible, check out the Imbuing Guide.