Location The Butcher can be found early in the "Depths" before you get to the sewer portion.
From what I have found there are two of them. One is accompanied by poison dogs, the other is gaurding the Pyromancer NPC.
The Butcher attacks fairly similarly to the Large skeletons in the Firelink Graveyard.
He carries two weapons, a massive butcher blade and something else i have not been able to discern (please update)
Strategy They are fairly slow and easy to dispatch if faced one on one.