She said that Quakers were very suseptible to fatty liver disease and also pancreatitus.

I have read that quakers, like amazons, are prone to obesity and its associated diseases. An adult parrot's diet should be about 10 - 15% fat. Sunflower and safflower seeds are about 40% fat. A parrot's metabolic rate is so high that they will try to eat the foods that give them the most energy (calories). Since fats are higher in calories per gram, birds will prefer to eat high-fat foods that give a higher energy return for the amount eaten, although it is not good for them. This is why parrots seem to get "addicted" to sunflower and/or safflower seeds - because of the high fat content.

She said wheatgerm oil would be a much better thing to use. Have any of you guys heard of this before?

Yes, I have. The pure oil produces better results in smaller amounts, thus the bird doesn't get as much fat/calories as with sunflower seeds. The concept is that the bird's skin/feathers are too dry (like you or I with dry, itchy skin) and this is the cause of the plucking. The oil taken internally tends to correct this, thus reducing the plucking (in theory). Daily bathing or misting with a mixture of water and 10 - 20% Aloe-Vera juice may do just as well, in some veterinary opinions. Another alternative (for giving internally) would be Vitamin E oil, which has other benefits. (Use the kind that's made for human consumption!!)

What is pancreatitus, anyway?

That would be inflammation/disease of the pancreas, which has to do with regulating a number of substances in the bloodstream. For example, it is the organ that fails to produce sufficient insulin in diabetics. If you make it work too hard, it can wear out, putting the body's balance of these substances (blood sugar, insulin, fatty acids, etc.) out of whack. Then the bird either gets sick and dies or has to get external correction, such as insulin shots. (I tried to explain that as simply as possible, since most of us probably don't have medical degrees!)