Arkose: If you go back to where you began and explore that area more thoroughly you will find a couple of sword and various other goodies as well as some weak monsters to slay (all monsters with "juvenile" or "young" in their name are weaker versions of the normal ones).
Combat becomes much easier once you have gained a level and have some "learning points" to spend on skills. One way of getting some easy experience is to take a trip to one of the other two camps with a person from that camp leading the way. They will slay all the beasts for you and you get the experience for it. :) You can even antagonise enemies outside the guide's normal aggression range and lead them towards him. In both cases the guide won't lead you back in the same manner (if you follow him back you don't get the experience), but by then the path should be clear of dangers anyway so you should be able to make your way back on your own once you've explored your new location a bit more.
One thing you should definitely make use of is a bow or crossbow (if I recall correctly you can find a bow near the tree on the path down from the starting area). When you have one drawn the auto-targeting system will notify you of targets (both human and beast), which means you can sort of wave it around a bit while travelling to find monsters you can win against while avoiding ones you can't.
Another thing to bear in mind is that everything has a trade value. Older weapons are very useful here (e.g. once you have an Old Sword you no longer need Rusty Swords or Pickaxes). Wherever possible you should try to pay for goods with your own goods rather than using ore because some items and quest requirements can only be paid for with ore. You should hang on to food and alcohol because various quests and opportunities can be solved or unlocked with such things (plants and mushrooms aren't needed except for a couple of quests). One great way of making a lot of money is learning hunting skills, which will allow you to get skins, teeth, etc. from slain beasts.
Anyway, I hope that makes some things clearer for you. :) This game is very unforgiving, but once you know how things work and get some better skills and equipment things become a lot easier.

lordhoff: Do you need a basic skill level to use the bow? I had mine drawn and the beasts name came up when pointed to but I couldn't fire (yes, I had arrows :) ) and I was quite close.

Arkose: I programed "cntrl up" to my "G1" key and used both ('G1" and "cntrl up") to get it to work. Nothing happens. So far, the old sword took care of things but I would like to do some range fire - especially at wolves (from a hopefully safe perch). Basically, I keep trying to fire the bow repeatedly then run, draw the sword, and do things the hard way :).