Craig wrote:
>Question: The words vargr and ulfr both appear to mean wolf. Is there some
>subtlety to their usage? does one have negative or positive connotation?

úlf(r) means wolf, in the literal sense.

varg(r) is a term which means both a dangerous wolf and an outlaw/outcast,
which referred to outlaws living as wolves and being just as dangerous. on
occasion, it's also used to refer to a shape-shifter in the form of a wolf,
as this concept overlaps with that of an outlaw living as a wolf. for the
best example, check out the portion of Völsunga saga where Sigurð and
Sinfjötli are living as wolves.

-Selv

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