Ok, so I've been spending some time in Morthal, and of course heard from the magic-distrusting townspeople that their new wizard resident, Falion, is up to *something.* So I waited till late at night and followed him out into the swamp. I followed him to some standing stones, where he just stood there doing nothing. Waited a few in game hours, he still did nothing. So eventually I talked to him, asked him "what are you doing." Well, he never actually tells me what he was doing. He just says "none of your business." So then I can either blackmail him into giving me 200 gold, or just say "sorry," basically. Then found out I could "turn him in" to the Jarl, when my character somehow knows that what Falion was doing was "casting spells." Jarl says thanks, it'll be dealt with, and that's it. Nothing else happens. Actually, nothing did happen to Falion. He' still in his house like normal.

Is this right? Is this how it's supposed to be, or did I run into another bug? If it's not a bug...well, that svcks. I was hoping for/expecting something a little more interesting. I would have at least liked to know *exactly* what he was doing, why he felt the need to do it in the middle of a swamp at night, and why the Jarl even cares. Felt like it could have been a much more interesting/involved quest, but ended up just being nothing...anyone else done this with Falion?

No its more than that.
I won't spoil it, but in certain circumstances with cetain problems he can be very useful.
he is there to provide help in that situation, so will be much ado about nothing unless those circumstances occur.

He gives you a quest. Though it might just be a Radiant Story quest.