Shelob is a special Spider NPC, having red lines instead of green, Shelob has about twice the health than a regular spider. They can be found wandering the swamp, or inside of a small room with spike trap floors inside of the mines. (Pulling the lever near the two gates trigger all the traps, pulling the second lever near the single gate will open the gate) Shelob will be renamed to "Bubbles" if the Arachnophobia filter is enabled.
Shelob will drop Dyrnwyn, the magic sword in a heavily degraded but blessed state, as well as a -5 cursed ring of invisibility, the ring is very useful for Incubi and Succubi, and the sword for everything that isn't a succubus and incubus.
Some Trivia!
The name Shelob is a reference to the great spider from the Lord of the Rings. The -5 cursed ring of invisibility is another reference, a cursed ring that turns you invisible mirrors "The One Ring to rule them all"
Shelob in QOD beta
An old encounter with Shelob, where he didn't have the special appearance
Basically the same image