Yes, Lautrec...sorry if I didn' tell you anything, but I didn't want to spoil this mini-plot for you. I never understood why he kills that poor woman, all I know is that I always kill the jerk and resurrect the poor lady.
As True Evil said, you will be able to use that eye orb in Anor Londo, you'll know when you reach the correct area because on your screen will pop a message saying something along the lines of "You feel the orb tremble, perhaps you are near to his owner".
Then you'll have to use the orb and you'll find yourself in blue spirit form as a phantom of vengeance in the world of Lautre;: be careful, he's not alone, he has two buddies, one is a tank with spear and shield and one is a mage who just loves to spam greater soul arrows that hurt like hell.
If you don't mind to cheese the fight a bit and make the odds even (a 1 vs 1 with Lautrec), before going there buy some poison arrows from the undead woman, the one who also sells purple mosses for blight town, then, when you appear in Lautrec's world, equip them with your bow and without moving from the spot you find yourself in pelt his two buddies with the poisoned arrows, eventually they'll die for the damage over time. Then you can have a fair duel with Lautrec. Hint: his weapons completely ignore shields, so instead of blocking his attacks, roll away from them.
Once he's dead you will obtain the soul of the Firekeeper lady, if you go back to Firelink Shrine and use the soul on the spot where she could be found (don't use it from your inventory, click the cage and a prompt to use the soul will appear), you'll resurrect her. 
About your build: I see you have highish strenght and still use the drake sword that, while great at the beginning, doesn't scale with any stat and has very poor reach. Why don't you try to use a plain longsword upgraded to +5 or even better, a bastard sword (you can buy it from the blacksmith near the undead church) upgraded to +5: better reach, the damage is more or less the same and will keep raising the more you level your strenght (be careful, for strenght after 40 points you start getting diminishing returns, as in after that threshold you'll need to spend more points to receive less and less bonuses).
You could do with some more stamina as well, and perhaps equipping the Grass Crest shield might be better: it has only 95% physical damage resistance, so you'll take chip damage from enemies, but while it's equipped it makes your stamina regenerate faster. Faster stamina regeneration = very good, no matter what your build is.
Also, you might want to try and kill Havel for his ring: when equipped it increases your equip load, so instead of having a fat roll (slow and sluggish) you can mid roll (not slow but not as fast as the "fast roll") and be less vulnerable when dodging. To kill Havel easily I'm afraid you might have to cheese him, unless you master the art of backstabbing and/or parrying and reposting. If you search on youtube, you'll find plenty of players showing how to kill him easily. Trust me, that ring is useful.
I would also suggest to try different kinds of weapons: if you find a weapon you can equip, try it to see if the moveset is to your liking: in this game the moveset of a weapon is often more important than the damage it does.
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