ED can be a very hard game but however as Raze said it can be made much easier by having your character's level equal to or above the enemy's level. If you find an area too hard, complete other quests first to raise your level and / or find other areas with weaker enemies. Also focus your skills into one particular class i.e warrior, mage or ranger. I prefer to play as a warrior mage so I can get up close and personal and also use magic from a distance. For warriors you can specialise in single handed weapons, two handed weapons, dual wield weapns or even a mix. Obviously then you have to loot / buy the most appropirate weapon.
The underground tunnels are good areas to start and have weak(er) enemies you can level up on. Keep at it and you will be rewarded by Sentinel Island and later your dragon form.
By fire and by blood I join with thee in the Order of the Flame!
Arokh's Lair - Drakan & Severance: Blade of Darkness forums - http://www.arokhslair.net