I highly recommend pursuing the idea of your character over any perceived mechanical benefits. Arcanum really rewards roleplaying, so you should do so!

Oh I will, I just wanted to get a better idea of how many ranks to assign to Susannah Dean's Firearms skill; while Charisma is important for her, being able to eventually shoot without putting a hole in her foot is also important, so additional data was needed to make sure I didn't over or under-serve anything. I briefly toyed with the idea of having her start with the Heroic background, but that seems more like something she will grow into through roleplaying rather than starting out; after all, anyone claiming they're a hero from the get go without doing anything to earn the title has forgotten the face of their father.

No background at all is also a perfectly viable option, especially if none of the in-game backgrounds match your character idea.

Backgrounds are really easy to mod, so if you want something specific you can make your own.

Thanks for everyone's help. Is there a way for me to credit everyone's responses, or would I need to create extra threads for that purpose?

Make a choice, and pick one response as the solution. Think of it as practice. There are many choices to make in Arcanum. Upvote the other remaining helpful answers. Better to skip spamming the forum with extra threads.

I give up. I made the mistake of trying to talk to people to gather information, and whenever I did, there always seemed to be one asshole in the bar who immediately recognized me, no matter what I did, and dispatched me and my companion in a single round. I decided to stay away from unnamed NPCs until I had leveled up a bit and gotten some better gear, so I went to do some sidequests. I stumbled upon a sidequest about shutting down some kind of magical portal, but the game all of a sudden started to get frustrating about letting me know where to look. I had thought the game would note any clues I had read about its location in my journal, but no such dice; it doubly sucked once I realized I had saved over my file after giving the journal that might have helped do so away, so I couldn't reread it. I decided to go hunting for it, and noticed that the random encounters all of a sudden had an exceptionally good chance of curbstomping everyone without batting an eye. I might not have minded if the game allowed me to flee the encounter a la Fallout, but again, no such luck. At the moment I realized that I was going to have to save scum to so much as travel back to town to complete a quest, I had to resist the urge to throw the computer across the room.

Look, I like what I've seen of the game thus far, but it has some serious balance issues that make it feel virtually unplayable, or at very least it feels that way with the approach I'm taking. Am I doing something wrong, or is this just something I'm going to have to deal with if I decide to continue?

This is why you should save before talking to anyone. Arcanum's dialogue usually can't screw up your game on the same level as Planescape: Torment's can, but there are plenty of situations where you'll want a backup save - and I don't mean auto- or quicksave. The game has unlimited save slots, so why use just one?!
Let's see... I haven't played Arcanum for a while, but I do remember the path near Liam's house that leads down to Liam's corpse and the portal. You don't always have to use worldmap travel to find something. (Stick to the roads!)
IIRC, you can flee if you run far enough from the enemy that the game lets you use the worldmap icon.

Encounter issues like that is why mages are great - they can get Teleportation. :)
Balance issues are there, but Arcanum is far from being unplayable if your level is high enough for the area and you've powershopped for good armor and weapons. Yes, powershopping takes time, but it's worth it since you start the game with clothes that barely protect from anything, and getting something decent from pseudo-randomized magick chests requires luck. Properly equipped companions can finish off the enemy before you even get a chance to attack, and going into areas with even medium-level encounters (past Tarant, if traveling to Dernholm or Blackroot) without proper gear is suicidal. And if everything's so bad it looks hopeless, there's always -norandom (but you don't really want it later in the game, as it can break some quests).

I have yet to get there. I have gotten out of the starting town, made my way to Toone's sister, started taking a few quests in a different town on the same side of the bridge. Also, the problem wasn't that I couldn't talk through everything; my problem was that even after somehow making it to level 5 1.) at any given bar I had a completely random chance of being insta-killed by a level 20 something assassin with all of the magic gear, and 2.) that any given random encounter on the overworld map regularly curbstomped the party.

I had been trying to mitigate the temptation to metagame by only using one slot. Guess that one's on me. I found the path when I tried playing again. Granted, the party got massacred by a void lizard, but at least now I know that that's something to wait for doing at a higher level. Either that, or the game expects me to have been buying a lot more awesome gear than I have been, since I tend to blow a good chunk of my money on bullets. Either I need to re-examine my budget in order to be able to get better gear and get the money needed to become an Expert in Firearms, or else there is some mythical fountain of coins that the game expects me to have found by now. Oh, *I* can run; Virgil and the half-elf healer would rather stand their ground against the timber wolves who laugh at the ridiculous AC Virgil's armor gives him; bear in mind, each one of these wolves was hitting more often, doing more damage, and taking more punishment than a *black bear*. My problem isn't being under-leveled for a given area; my problem is that the random encounters for the area surrounding the starting set of towns that I need to travel through are ridiculous, to say nothing of the random assholes in town who have more magic gear than I can imagine and are more than 5 times my current level. If powershopping is required, where I supposed to be getting all of that money? From quests? I spend just enough of the dosh I get from that on bullets to make sure that I only have about 100-200 coins on me at any given time, otherwise I risk running out. Grinding? Most enemies don't drop shit, and what they do drop isn't worth the number of times I would get mauled by yet another pack of timber wolves. Gambling? That's just more save scumming. Haggling? It seems ill advised to blow my precious single CP per level on that, as I'm already stretched for them as it is.

Look, I apologize if I am coming across as angry, but this is genuinely frustrating. I haven't been this alienated by a game I want to like in a while, and I'm at my wits end trying to find some way to make it work for me.

AC in Arcanum is rather worthless; you want Damage Resistance. Lots of it.
If no other options are available, sell daily garbage. (Not kidding - worn ladies' boots sell for about 18 coins.) Better yet, have Jayna craft stuff from herbs, it sells for much higher price than you pay for the components. There are ways to rob merchants, too. Oh yes, and make sure to wear a smoking jacket in stores: high reaction gives you discounts.

That's not how it works. They attack you if you tell them you're the lone survivor of the Zephyr crash, which is not a good idea because there are people trying to kill the lone survivor of the Zephyr crash. If you still want to go around telling everyone regardless of the consequences, the game doesn't stop you.

Using one save slot is a bad idea, regardless of metagaming. I don't know how much experience you have with games of this type, but you should be using several save slots. Over the years I've developed my own system using six or seven.

I have an "I just entered a new area" slot, I have an "I'm about to leave an area" slot, I have two slots I use while I'm exploring an area, and I have a slot I use while I'm travelling from area to area on the world map (for random encounters and things like that). Sometimes I also keep a slot for "I'm about to start a big fight," because I might want to fight it more than once.

Also, don't use quicksave and quickload. Those sometimes cause save corruption. It doesn't happen very often, but over the course of a whole playthrough the odds are too significant to ignore. The mistake you made is that you tried to fight the void lizards. The game suggests to you that they're very dangerous. Your mission is not to fight them, but to close the portal. HINT: once you close the portal, you'll find the void lizards are no longer a problem. Hmm...yes, you've stumbled into one of the game's more serious flaws. Firearms seems like a fun way to go, right? Actually, Firearms is arguably the worst attack form in the game. It starts out mediocre and gets worse and worse as the game progresses. No wonder you had trouble with the void lizards - they're highly magickal and have significant resistance to tech-based attacks. One of reasons Firearms is bad is because you blow all your money on bullets, so you'll be dirt poor for the whole game. Sad but true.

If you're trying to be a Firearms diplomat...well, that's probably the worst choice I can think of for a beginning player. If you don't want to start over from scratch, I'd respec your PC for Explosives (so you can use grenades) or maybe melee weapons. There'a s Virgil dialogue cheat script that can do this for you. It's not all your fault. I would have suggested avoiding Firearms until you had a lot more experience with the game. Firearms is inherently frustrating, and it works best with metagaming, frankly.

No offense, but please don't drop the "U" word. It's horrifyingly overused, and doesn't apply to Arcanum. That word should only be used if a game literally won't start, or crashes so often you can't do anything. Just a pet peeve of mine.

If you're still having problems, keep posting here. We'll try to help you as much as we can.
:)

Regarding the random encounters: I've heard that the original game used more level-scaling for random encounters, to make them appropriate to the player's level. But apparently this system was really messed up, so there were lots of creatures that would never appear at all, and lots of other problems. So the Unofficial Patch by Drog Black Tooth just removes level scaling entirely. This means that sometimes random encounters are just too hard. You can get around it by saving before traveling, and after every successful random encounter. Annoying, but apparently better than the alternative.

I personally don't think powershopping is required, but as others have mentioned you'll be stuck spending a lot of your money on bullets. That's OK though, you will get more powerful after you've gained some levels. I recommend heading to Tarant if you haven't yet. There are a bunch of quests you can do there that aren't too hard, and will reward you with a lot of experience that will help you level up and handle yourself better. Split your time between Tarant and the other towns you find. Do as many quests as you can. When you get a quest to go to the Black Mountain Clan Mines, delay as long as you can before you go, visiting every town and other location you've found and doing every quest you can manage. The Black Mountain Clan Mines are tough and frustrating but the game gets SO much better once you're through. As a firearms player, you will definitely need help from your companions in there so try to get them equipped with decent weapons and armor.

If you haven't done it yet, a single character point in Explosives is enough to let you craft your own bullets (you can buy the schematic) which can help a little with ammo, but you will still need to spend a lot of money on it. It's also enough to craft molotov cocktails (you get the schematic as soon as you put a point in explosives), which are cheap to make and very useful. These don't damage you or your allies (for some reason), so even with low (or nonexistent) throwing skill you can just toss one at your feet and it will damage nearby enemies and also push them away from you. Pretty cool. Might fit your gunslinger character to occasionally toss a molotov, too. Actually, you could consider throwing as an alternative backup combat skill instead of melee. Boomerangs never run out of ammo and keep you at a distance which can be good. And then you can even toss molotovs a little farther too.

Also, since you are charismatic and will recruit followers to help you out, it's useful to know a few special commands for them... you can tell them to back off from fighting using one of the function keys, I forget which. This is helpful if you want to try running away; in the mines you'll probably need to withdraw back to Tarant several times to repair your equipment and otherwise regroup.

Don't give up! But also if you are really frustrated, don't be afraid to start over with a totally different character design. Arcanum really rewards different characters builds, not just in how they work, but also in choices you make. It's surprisingly reactive to your input, and a big part of the game's appeal.

By the way, if you want some more specific character advice, perhaps you could tell us your current level, stats and skill levels? Then we could make specific suggestions on where to spend points next.

^ Follower command chart in the patched game, for reference:

[F1] Walk - followers move to the tile indicated by the mouse pointer.
[F2] Attack - if a target is indicated by the mouse pointer, followers attack the target; also undoes the Back Off command.
[F3] Stay Close - followers stay at close distance from the PC when walking around.
[F4] Spread Out - followers stay at longer distance from the PC when walking around.
[F5] Back Off - followers currently engaged in combat stop attacking the target and resume following the PC.
[F6] Move - followers walk to another free tile nearby (useful if you need to get them out of the way).

On the Back Off command: if anyone in your party suddenly becomes obsessed with a wall, refusing to move away from it, this usually means they're in combat mode against an unreachable enemy behind that wall, so telling them to stop fighting fixes this.

The ones I talked to attacked me even when I said I knew nothing about the crash. Fallout 1-2, Quest for Glory 1-5, PST, and a few others come to mind. It's not that I lack experience with the whole 'save early and often' philosophy, more a lapse in judgment on my part. What? When did that happen? Jesus. I had heard it would be a challenge, but this is ridiculous. FFS, the game goes on and on about how guns were so amazing that they took down the Dragon Knights, and it turns out that they are shit. Ludonarrative dissonance in a nutshell. No kidding. Think I'll go with a Dex based Rogue character, focus on sneaking an backstabbing. The fact that Dex is the basis for so many skills should cut down on the amount of points I would have to blow to raise a stat before I could raise an ability. I hear you regarding using 'unplayable' without qualification (well, kind of; I'm a cinephile and not above deeming something unwatchable even if the film is visible), but I did qualify that word with the term 'virtually' and noted that it might be due to my approach. Given my experience and that sounds like gunfighting is something that only really works with metagaming, it honestly does seem that that one particular way of playing the game for the first time so stacked against the player as to be practically broken.