Menyareth is a member of the Bateen, that makes him an accepted member of both the seelie and the unseelie court of the fey. If you ask Angel that is not really a problem. He confronted the party because he wanted the spirit of decay to spread out further to harm the woodfolk. He also seemed to know a pretty great deal about the spirit. Sentences like "you want to rip out his heart?" really seem to indicate more than some passing knowledge, because the Colana Dialiah was at the place a normal humanoid being would have his heart. He did promise to help the heroes if the spirit would have driven out the woodfolk, what kind of help that would have been we will never know, because the party doesn't wanted to help someone destroy a village full of innocents.
Menyareth was based on an Arrow demon, simulating him being able to shoot a lot of arrows. He also had the strange ability to split away from his shadow. In that state if only he or his shadow is threatened there would be a 100% miss chance. That reduced to 50% if both he and his shadow is threatened. He could also instantly teleport to his shadow if they are away from each other and was able to stand on the leaves the strange feywild trees produce. Normally this requires a Balance check that is slightly easier than walking on clouds, Menyareth however doesn't seem to have any problems with that.