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Couple of questions:

1) At character creation, is it important for squishies to have a decent amount of constitution? I find that they often die right at the start of fights because bad guys will target them over my fighters. What else can I do to make them more durable on round 1 (particularly the fights where one is ambushed)?

2) How aggressively should I craft/create items and scrolls? The xp penalties don't seem to steep. Are wands a good idea? This concept of spending XP to get expendable items hasn't really been fleshed out in any other PC RPG I've ever played.

1) Sure, constitution is very important for wizards. The other thing you can do is have a high dexterity or use armour.
2) If you do it aggressively the game will be much easier for you. Wands of healing are very useful and so is the feat Craft magic weapons.

For low level wizards, I believe the spell Mage Armor gives you + 4 to your AC until you rest(meaning you have it on at the start of a battle), which helps a great deal against bowmen and the like. (Or am I confusing this with how it will be in KOTC2? )

Constitution is really important. A wizard gets 1-4 hit points per level. Constitution 18 gives you 4 extra hit points per level, effectively doubling your hit points compared to constitution 10. Second most useful stat for wizards.(some might argue that Con is more important than Int in a table top game, but for KOTC, Con is second)

I feel that for crafting magic stuff, you want to do it sparingly in the start(a cure light wounds wand or two perhaps), but once you hit level 9 or so, you should craft as much stuff as you can. Before that, the stuff you can craft isn't that good compared to the loot you find from enemies, but around that level, it becomes the opposite. The stuff you craft is far superior to what you can find, especially since you can fine tune the items to fit your characters.
Going too crazy with crafting will lead your crafters to be even several levels below your non-crafting guys. This isn't a problem since you actually get comparative experience, if I remember correctly. Meaning, a level 10 char will get less exp than a level 9 char for the same encounter. So catching up isn't that bad, but being two levels lower than the rest, especially if your wizard is the crafter instead of the cleric, can have devastating results on your ability to deal with powerful foes or a lot of weak ones, since high level wizard spells are super powerful.

Thanks guys.

Next question - what is ranged combat good for? I can't really figure out the advantage. Melee combat seems to do so much more damage.

What class usually takes a ranged weapon? Is it good to have a character whose main job it is to shoot?

Ranged combat allows you to use Sleep and Slaying arrows, or disrupt a spellcaster with Ready versus Spell. Later in the game, a Blinding bow allows you to incapacitate a few enemies every round. Your wizard can also use ranged combat when he has run out of spells.

In late game especially, in many cases you will run into a situation where you have 4 attacks. Moving would reduce the 4 attacks to just 1 attack, so it's often better to use a ranged weapon, especially to take out mages or other low-hp foes. Your bow may also have radically different enchantment bonuses than your melee weapon, as Bluesalamander said, meaning they're also a utility item.

Ranged weapons fit all the classes, in the beginning mostly wizards and maybe clerics, midgame no one really uses them, late game fighters use them. Early game you have just 1 attack with a fighter anyway, so you might as well charge the enemy. Wizards on the other hand will run out of spells pretty easily and it's costly to use wands too early on. Midgame you'll generally have enough wands and spells to last your wizards, and for fighters you still don't have enough attacks to justify using ranged vs melee. Late game, when fighters have a huge amount of attacks, and some of the battles are over massive ranges, using a bow can be very useful.

I really wouldn't have the main job of any character to use only a bow. Later your fighters will have enough feats to get weapon focus and specialization to bows in addition to your melee weapons, so while it's not their main job, they're pretty good at it.

Cool thanks.

Another small question - where do I find empty wands to enchant with spells?

Hi Sieben, you can craft empty wands with the feat Forge Weapon. It's a good feat to give to a knight.

Awesome. Thanks. I'm really enjoying your game but am finding it a little difficult. You really have to maximize the tools you use. It's not like NWN2 or other cRPGs where you can just have "good" characters and ignore a lot of stuff like resistances and crafting.

I had a primarily ranged fighter in my two fighter, 1 mage, 1 cleric party. mid to late game, ranged fighters really outclass melee fighters unless you can get the melee fighter surrounded with multiple attacks and great cleave.