The conversation was triggered by giving the NPC an item. The NPC still has the item, but doesn't react to any reference to this item. Tried practically all thinkable combinations, but the NPC has no memory of our previous encounter.
I don't know why discarding active quest has been removed from the game. Maybe it has become too complex with all these new quest. But now I've got a growing number of quests and NPCs that are locked. This is making me abandon doing quests all together. This is really a shame, because quests are one best features of PlaneShift.