For you lone wolves in the horde:
It's entirely possible to solo this quest in Falconwing Square (in Eversong Woods). The key is to start dousing the flames from the trainer building (not the inn) first and fast, since it's farther away from the water barrel than the inn. Don't forget that the Headless Horseman starts the fires in two waves (in this order for example: building #1, building #2, building #1, building #2).
I concentrated my water buckets on one location only and if the other flames started to spread around (i.e. they grow large), I threw one water bucket at them and resumed on concentrating my water buckets at that one location. There's probably a better tactic for this but this one worked for me.
Once you're done with the other building (can take a few tries if you're unlucky or if you screwed up), start dousing the flames from the inn. It's a lot closer to the water barrel, so dousing it's flames should be a piece of cake, even if it's on full fire.
I recommend movement enhancing skills/talents/items/enchants (Swiftness Potions perhaps?) if you try to solo this, they make it a lot easier.