I am not a fan of big party size but is it possible to play with only a single character and maybe use npcs instead? Or even with just two player characters. Does this even work or would I get stomped on?

If it works, what are some good combinations for duo characters?

It could work, especially since you can hire up to three NPCs to help you out. In that case I'd advise you to do some non-combat quests you find in Hommlet to level up your PC(s). With only 2 characters you could probably reach level 3 that way.
The late game will be very hard though as you'll hit the level cap (lvl 10 in a normal game) fairly early, then nothing will compensate your lack of numbers.
I would advise you to try out the Circle of 8 mod, since it raises the cap to 20.

As for classes, you need someone good with negociation skills (bard, sorcerer, or a cleric, paladin or rogue with high charisma can work there), since henchmen can't fill that role. Personally, I'd pick a cleric (probably the most powerful class in D&D 3rd ed) and either a fighter (good at early levels) or a wizard/sorcerer (good at later levels).
Either way, try to max out their stats in character creation.

Edit: Oh, and make sure you hire Elmo from Hommlet. He may not look like much, but he's a 4th lvl fighter, that helps out a great deal at the beginning.

Ah, I didn't even factor in negotiation but that's a must. I am using Circle of 8 so I will be taking advantage of the level 20 cap. If I went Fighter and Cleric, would having the Cleric focus on negotiation gimp the healing and support ability?

Also, how important are rogues? For traps, locked chests and suchlike?

No, the healing and support is entirely spell-based, while negociation is skill-based, there is no conflict.
Just make sure your cleric has 18 wisdom, and good intelligence and charisma. Decent stats in the rest are needed too since he'll have to get into melee. That means you'll probably have to do a large number of rolls, but it's worth it.
Human would be best, btw.
Then put points into diplomacy (class-skill), and don't be afraid to put some into cross-class negociation skills like detect motive.

Your fighter will take care of the intimidate skill. I'd say giving him a few levels of rogue (say, 2 or 3) should be enough to take care of any traps/locks. Actually, I'd start your fighter as a rogue for the skill points, then keep him as a fighter and only add a rogue level every 5 levels or so.
If you don't want to do that, there is a rogue NPC you can hire in Hommlet, he's decent.

Thanks for the help! I will be starting a new game soon using your tips. Mainly thing I was thinking of in a party was to have a front line PC and a support PC. And fill in the gaps as needed by npcs so having that rogue npc is good news.