Heh, for all the dozens of times I've played through the game, I can't actually say, as I always turn it off and take command of each of the characters' actions myself. I believe it's ok for melee and ranged, but the spell chucker AI is suspect. But as I said, I can't say for certain.

That actually might work for me as I only have one spell caster and that's an evil Cleric I only have around to heal. I'll try both.

Generally in the IE games the AI is good, but the pathfinding is bad.

But you can improve the last one giving more seeds ! on the config options. Give a very high number.

By the way, the IA from other Infinite Engine is ok as long you don't let the to cast by themselves (Wizard agressive is very bad by example). The monster IA is aother story and for ID series I hate it.

The monsters AI can be modded, by modifying their combat scripts.
I wish there was something like Sword Coast Strategems for the IWD games, but then IWD is more about fighting armies of grunts that fighting the adventure parties, wizards, liches and dragons...