The town's name is Eirulan and the tram over to the inn is due north of and visible from the Eirulan teleporter. Take the tram across to the inn. Once across, head northeast past the sign out front of the inn to the inn's entrance and head on in. There is a curved stairway leading up immediately to the north as you enter the inn. Head upstairs and speak with Leni, the innkeeper. Choose the second option. It costs a fair and increasing amount of gold, which your party must possess, to upgrade to the next slot. Four slots are maximum for the single player game. As you progress in the game, there are also inns in Aman'lu and Kalrathia, where you can add additional slots or change party members. Any characters or pets sent to the inn in one town are instantly available in the inns in the other towns (obvioulsy the list of who's in the inn is just maintained once).
[This message has been edited by rayearle (edited 09-13-2005 @ 01:07 AM).]