I've only played through the demo of KotC, so I'm not in much of a position to be making detailed suggestions for things that could be improved in the sequal, but here is my two gold pieces worth anyway. I really enjoyed the demo and am very tempted to purchase the game, but a few things are keeping me away, certain things which are really annoying and which I hope are not a big part of the full game.
a) Moments like the troll battle in the demo, where the party is surprised can be intensely annoying. I think the battle system in KotC is really wonderful and the appeal of the game is getting to enjoy this tactical element. However, moments like the troll battle defeat this purpose by putting you in a situation where you are forced to reload 10 times before being lucky enough not to have your half your party wiped out before you can blink. Obviously reloading is going to happen a lot in a hard game but I don't like the idea of relying on chance to get past an encounter.
b) The situation mentioned above could be greatly improved by allowing spells to be cast outside of combat. Then a party could at least prepare itself for what might lie ahead by casting some protective or buffing spells. I don't know whether this would go totally against the rule set you are working with, but it would be a lot more enjoyable in my opinion.
c) Having to rely on finding fireplaces seems like an odd design choice, unless this is intended to make certain sections of the game more difficult. It would make more sense to have the option to build a fire, as long as you have firewood and either flint and tinder, or perhaps cast some kind of flame spell on the wood. There could be an option to gather wood outside, or buy it, so that the party would have to have it in their inventory in order to be able to rest, but at least they could rest when they choose to, and not have to look for a fire place that just happens to be lying around.
d) It would also be much better if it were possible to move characters individually outside of battle. Especially if you introduce a rogue class in the next game, it would be good for one character to be able to scout ahead. A good example of where this could have been useful is the bit in the demo where you get grapped in the narrow tunnel and fried with lightning by the mage and his friends.
Anyway, just a few thoughts. Overall I'm very impressed with the game, at least what I've seen in the demo, and I think with a few improvements it could be a really great RPG.