Killing Stuff

Combat works much like being in town or outdoors, except that you move your party one PC at a time instead of all at once. You will get to move each of your PCs, and then all the other people/monsters move (and maybe attack you). Then the process repeats.

The main difference between normal town and combat mode, of course, is that you're probably trying to kill something.

Action Points:
Each turn, each character get a base 4 action points. Wearing heavy armor reduces this amount; being hasted increases it. Whenever you do something, this amount goes down. It can go negative, and when your PC has 0 or less action points, your turn ends.
The actions you can perform in combat are listed below, with their action point cost.
Line of Sight:
A character can only fire a missile or spell at a location he or she can see. Also, trees and other obstructions between the shooter and the target will make the missile less effective.
When targeting, a line will appear between the attacker and the target. When the line disappears, you can't see the space you're aiming at.
Moving and Attacking:
You move by clicking on the terrain screen in the desired direction. To attack something, move into that thing. The result of your attack will appear to the lower right.
If you attack someone who wasn't attacking you, you will be asked if you really want to do that. Attacking innocents will bring the town guard down on your head, and you may have a serious problem. Be careful! Merely causing damage to an innocent will also bring the cops down on your head, and you may not get a warning before you do it.
Switching Places:
In combat, when one PC moves into another, they switch places. This is very useful during combat in cramped quarters.
Stand Ready:
As before, when you click on the active character, that character will wait. However, should a hostile creature then move into weapon range, that PC will attack the enemy.
Targeting:
When you cast a magic spell or fire a missile, you select a creature to fire at by clicking on it. When you may want to aim at someone off screen, before selecting your target you can scroll the view around by clicking on the border of the terrain screen.

The buttons have the following effects:

Other actions have an action point cost:

This sums up the things you can do in combat. But what of the rewards, and the risks?

Getting Damaged, Armor:
Every time you get hit, your health goes down. When you receive a blow that would take you to 0 or less health, you end up at 0 health (this is signified by a coughing noise). When you get damaged and have 0 health, you die. When you take a lot of damage and have 0 health, you will be obliterated (making this PC much harder to raise from the dead).
Fortunately, there is a wide variety of armor in the game. Armor will not reduce the number of blows you take, but will reduce the amount of damage you take when those blows land. However, the heavier the armor, the more it interferes with your ability to attack and cast spells (although defense skill reduces this effect).
Changing armor takes a while. While you can change helms, gloves boots, and shields in the heat of combat, you cannot change armor.
Dying:
This happens. A lot. When it does, all the newly deceased's possessions drop to the ground in a pile. Should this happen when you are in a boat, you may need to row back for them.
Items can't be dropped when outdoors. Should someone die when wandering around outside, the items will stay with you until you enter a town or get into combat, at which point they immediately drop to the ground.
Dead people can be brought back to life. This can be done using certain priest spells, or at the healers you will find in some of the towns. If the killing blow does enough damage, it will turn the PC into dust. It will then be much more difficult to raise him/her from the dead.
Killing Enemies:
Whenever you kill an enemy, the person dealing the death blow gets some experience, and everyone else gets a much smaller amount. Should this experience give you a level, the game will let you know in the text screen.
Treasure:
Will appear when the monster is killed and you get lucky. If you have decent Item Lore skill, the item may even appear fully identified.
Fleeing:
Of course, sometimes the enemy is just too tough. When this happens, it is possible to escape.
In town combat, you must move your party to the outskirts of town, leave combat mode, and then walk out of town. You cannot leave town when you're in combat,
In outdoor combat, you flee by moving to the boundary of the battlefield (which will look like a black nothingness) and walk off. If you succeed, the character will have fled. When your whole party is fled or dead, or you've killed all of the enemies and pressed the End Combat button, combat will end and your party will be reunited.
If you are adjacent to a monster and move away from it, it will get a free attack against you (an attack of opportunity). The same goes in reverse.
Poisoning a Weapon:
Using poison poisons your equipped weapon, which can be either a hand-to-hand weapon or a quiver of arrows (not darts or throwing knives). Hitting a monster with it then does a considerable amount of damage, spread out over time. The level of the poison decreases with every blow delivered and every blow that lands. The poison is lost should you change weapons or leave town.
Using poison on an already poisoned weapon gives the weapon a strength of poison equal to the maximum strength of the poison already there and the poison you're putting on.
Enemy Resistances:
There are a wide variety of types of damage you can do. Hand to hand weapons do physical damage. Poison is another kind of damage, fire is another, non-fire magic (such as ice bolts or kill spells) is yet another. These sorts of damages affect different monsters differently. Many monsters are resistant to fire. Less are resistant to magic. Very few are resistant to poison, however - keep this in mind when dealing with that pesky enemy mage in the back.