Go to 'A Road in Cameliard' which is south and west of 'Tournament Grounds' and GET ROSE BUSH
Now go to 'King Arthur's Bedroom', ASK QUEEN HELP, she will ask you to find her a rose from her home town.
GIVE ROSE QUEEN she will smell it, and complain about being sad, she will drop a handkerchief.
GET HANDKERCHIEF, and go to 'Sir Lancelot's Chambers'
GIVE HANDKERCHIEF LANCELOT, he will smell it and get all embarassed about it.
Return to Guinevere, ASK QUEEN LANCELOT, she asks you to go and tell Lancelot she wants an appointment with him.
Return to Lancelot, ASK LANCELOT APPOINTMENT, you will get a little shout out on info.d ask him appointment.
Option 1 (keep the affair secret):
Return to Guinever, ASK QUEEN LANCELOT, ASK QUEEN TOKEN and you receive ... a rose of Cameliard.
Option 2 (snitch to Arthur):
Go to 'King Arthur's Chambers' and ASK ARTHUR AFFAIR, ASK ARTHUR TOKEN and you will receive ... get a bracer of loyalty!