I have two NPC in my party....they take their share of the loot after each encounter, which is fair. But the problem is they won't do anything with it other than hold onto it. They become encumbered negatively affecting their combat and movement. But I can't seem to do anything about it.....they refuse to drop anything or let anyone have it, they won't sell anything. This is a weird bug or am I missing something?

A good question. I've encountered one instance in wich a NPC refused to let go of one of his items (a breastplate). This was his own 'starting piece'. I could give him a better one, but he wouldn't let me move or sell his original set. Other than that, moving gold etc. hasn't been a problem. Are you by chance trying to move their 'own' equipment?

Thanks for the reply Zerotown. The stuff they won't drop, trade or sell is loot they picked up, not their original equipment. I can't figure out how to get their encumberance down.

That sounds like a bug... are you using the Co8 mod? The original game had issues with NPC's looting corpses and then not being able to give them to other players. I'm using the mod and haven't experienced any problems, other than the one described above.

This ToEE Co8-FAQ has some references to the issue in section 1, 'General Gameplay Issues'.

I decided to reinstall the game from scratch and add the Co8 mod. I wasn't using the Co8 mod when I had the problem. I'm glad I did this. The mod is great and the npc encumberance problem went away. Thanks Zerotown.