I'd qualify this as a bug. I finished the first round of quests for Selence (stealing from Ribald's, etc.). She gave me the key to her room at the Copper Coronet and I retrieved the pair of letters from the dresser. But when I traveled to the Umar Hills, there's no cutscene (there should be two, I believe), and nobody related to the quest (Varros and Kothonos) is at Vincenzo's Inn. I played SoS a couple years ago and didn't have this problem. Perhaps I'll just have to manually spawn Varros and Kothonos? I don't know what else to do.
Edit:
Well, it seems I done figured this one out, after examining the BCS file. The "sealed" letter from Selence's room is supposed to be unidentified, but when I first find it it's already identified. Using CLUAConsole I created an unidentified version and got rid of the identified version. Possessing the unidentified letter and its companion letter is the key to triggering the cutscenes and the subsequent spawning of Varros and Kothonos, and all's proceeding just merrily now.
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There have been 3 items by Tajoumaru (Search limited from 04-June 23)