Okay these are my first impressions of the combat system and attached are mini-walkthroughs of the first 3 fights as a mercenary. I don't think anyone should have much trouble with combat if you put the points into statistics affecting combat (quite a no-brainer, right?). I am going to post more as I get into more fights but as a point, I am going to try to get into combat as often as I can.
Creation
I swung by the first assassin fight 2 times to look at AP values and find out more about the fundamentals of combat mechanics. It appears that flat DR is quite significant, and that a sweet spot for AP should be important.
If anyone played NWN (the first one) PvP arena servers, your instinct should tell you that the natural counter to flat DR (Stoneskin, etc.) is efficient (fast and high hit-rate), large damage. In NWN, you'll go with a big, regular criticals build but in AoD Demo, I haven't found out exactly how criticals work so I maxed out my Strength for a nifty +4 damage bonus.
AP next. It's the bread and butter of strategic turn-based combat to be able to do as many things as possible within a turn because if you think about it, every extra action you have in a turn on average quickly builds into a serious advantage over the course of a combat encounter. However, stat points are limited and when deciding how much AP you should have, it's always good to get the highest possible without having to deal with leftover points (which in AoD does not translate to extra AC, like in Fallout, I think). Since I am trying to make-do with an idiotproof swing-swing-swing tactic, 10 AP is the sweet spot. Why? Because accessing inventory (for disarms, and equips) is 4 points, same as with a normal attack. Fast attacks cost 3 AP. So on average, you are going to have 3 attacks a turn, or 2 with an inventory access, which should be decent. Why not 12 AP? Because stat points are precious in the AoD Demo, and because...
Edit: Another thing that's very important but I didn't write about... the AP cap on armor. I'm seeing around 10-11 AP cap on the starting suits so that's another plus for having 10 AP.
HP matters. From the perspective of a mercenary playthrough that tries for the swing-swing-swing strategy, the lack of HP bloat puts crazy value on being able to sustain 2-3 more hits. With 10 strength and 8 dex (for 10 AP), I decided 8 con (50 hp) will be enough to tip myself over most endurance fights (which is basically the essence of the swing-swing-swing strategy - outlast efficiently). Having the ability to last 2-3 more hits means potentially having access to your AP advantage in extra actions (against a neutral opponent - in Fallout and in AoD Demo, so far, BWARGGHGH I SMASH opponents usually have 2-3 attacks a turn, and FEEEWWWT IM SNEAKZ agile opponents range from 3-4 actions a turn, so far). So, you are AT LEAST matching the number of attacks your enemies have. This is important because being to survive 2-3 turns more on HP without the ability to AT LEAST match the number of combat actions your typical enemy has is counterintuitive; you are just building on their advantage.
I neglected Perception and Charisma, not being the point of my play, so they both get the min of 4. Int gets the leftover 2 points for a total of 6. Not being entirely sure of the returns of the critical strike skill investment, I stuck to the swing-swing-swing philosophy of high hit-rates and put most of my points in Hammer (choice of equipment is outside of the limits of my judgement, itemisation is a whole different beast). There probably will emerge builds with fast dagger attacks being viable for a pure thumping build but for simplicity's sake, I chose the weapon that looks like it will have the highest damage range cap per swing. This is also in-line with the swing-swing-swing methodology against flat DR mechanics by employing highest damage possible. This is made more efficient by the fact that AP for dagger fast swings are exactly the same as hammer fast swings, for example.
First Fight
I can see how this assassin will be frustrating for non-combat centric characters. But AoD is a good RPG in that it provides for that - JUST DON'T FIGHT HIM, MAYBE? But for me, I'll mash him. There should be no problems at all for a mercenary character in this encounter, as long as you don't think fancy. Just walk right up to him, and repeatedly fast/fast/normal him. Disarm every other turn? Should not be a problem as you still get your 2 fast attacks in at 10 AP. And your sweet starting armor DR and respectable HP, combined with a high hit and damage rate (DPS, basically) will expand the difference between your HPs rapidly until he is dead. I was getting between 50-60+% hit percentage per swing; will be great if VD can reveal hit calculations then I can refine this dumb build more.
Edit: After more replays, I can see how a string of criticals lowering your stats (?) will put you in the FUCKED zone pretty fast, haha.
Edit: Fight 1.5: the two thugs if you choose to follow Verdanis (?) to sell the dead guy's wares are simple, but Verdanis dies all the time, don't know if I can manage to save him.
Second Fight
It's easy, and I don't think anyone should have problems with it. You basically have 2 piles of meat to distract enemies with. I am not sure on the priorities of AI in combat but it seems they are not very willing to let go of a target once they get into range of it and lands a couple of swings. So, just let the 2 idiots engage first, then just waltz in and hit on their targets. Another very basic concept in the numbers game is that you always try to reduce the number of enemies first, as every additional foe = entire additional set of actions vs you. Concentrated fire is the key. Don't look at the enemies like they are separate entities, look at them collectively like a single encounter. If this 'encounter' has a total of 20 actions per turn, and concentrated fire over 2-3 turns can readily reduce that to 16-17 actions per turn, it's definitely worth it. The threat is reduced significantly with every enemy death.
Edit: Remember the Fallout combat AP attrition trick? Just have rough guesstimate of you opponent's AP and if you have more than him, try to negotiate a sequence of movement in a turn after an attack to force his next turn to be spent mostly on movement. I know there's a disengagement mechanic so the efficiency of this depends alot on your avoidance/DR.
Third Fight
Uhhh, again, the AI as mentioned above is exploitable here, in my experience. Just walk to a corner on your first turn, and let the 2 idiots sort if out. Kill the survivor. Done.
Summary
So far, the combat is fine for a combat-centric character, and not as randomised as I was led to believe from several posts in this thread. I will play on and try to get into those thematic fights where odds are stacked against me, and try to surmount them and share on how I did it. Other than the small text (1920x1080) I am liking the UI and animations in combat. Sound effects are great as well. Once I finish every fight as a mercenary and writing about it I might try how vastly difficult it is using a non-combat centric character archetype. But seriously, a game comes along that doesn't let non-fighters fight like a god in all good logic and people whine about it? Cannot process.
Edit: I also think the gravity of combat and its danger is quite well represented so far, in the demo. It's never a 'hey-it's-XP-time' like many other RPGs. I like the intensity of the decision to even engage in a fight, it's realistic in a way.