Xzar is dubbed "the Mad Wizard" by his companion Montaron, and Xzar seemingly suffers from split personality. His grasp on reality seems to be somewhat tenuous, causing him to occasionally make unusual outbursts. He wants the player to journey with him and his companion Montaron to the Nashkel mines in order to investigate strange rumors there. Xzar has been sent by the clandestine organization the Zhentarim, to learn the origins of the sudden iron shortage sweeping the Sword Coast region, as rumors of the Zhentarim's involvement within the iron scheme has put the evil organization under increased scrutiny. Xzar and Montaron hate each other and are only together because they work for the Zhentarim. Despite his personality, Xzar is in fact held in high esteem by his superiors.
Source: Wikipedia, "List of Baldur's Gate characters", available under the CC-BY-SA License.