Sir Mordred can be found on the top floor of Keep Le Faye near Catherby. He is fought during the Merlin's Crystal quest. He can be fought, but when he reaches 0 hitpoints, Morgan Le Faye will appear and ask that you spare him. If you ignore Morgan Le Faye and continue to attack him, he will regenerate all of his hitpoints and you must fight him again while Morgan Le Faye wanders around aimlessly.
During the King's Ransom quest, he will actually die if you attack him, but will respawn soon afterwards.
Sir Mordred is also the leader of the Renegade Knights.
For whatever reason, he is much weaker than the rest of the Knights of the Round Table, despite being an ex-member of their order.