So I got the decanter of endless water recently and decided to get Ignus, problem is that whenever I talk to Nemelle she just says she can't answer my questions and eventually silences me.

I have the decanter identified so that it is called Decanter of Endless Water, so that is not the problem.

Did you complete the quest with Aelwyn for her? If she is en route to reunite with her friend, she won't answer any questions at that time.

Yes and no. I have 3 saves, one before I accept the quest, one after I accepted the quest, and one after I turned in the quest (and I waited for her to arrive at Aelwyn before talking to her).
In all of them she wont give it to me. I'm thinking that I may need to get someone else to direct me to Nemelle...

Ah, no. Thank you. I had talked to Ignus' lover and then she told me about the power word and I didn't feel like going on a hunt for someone as there was no clue given, so I looked it up. >.>

It worked, thank you.

Had another problem in the process though, game kept crashing whenever I traveled from one area to another. FIxed that by running as admin though. =D

Now that is a miracle cure for many problems with newer OS :P
Have fun with Ignus... for a time ;)