Where are you at in the game? I'm just now going to the water mages for my second "initiation". My characters are all level 17, and the monsters are around level 20 that I'm fighting. Here are the things that I've found that help out:
1. Manage your inventory - Make sure you have the appropriate items on the appropriate people. For example, you'll want all the intellect boosting stuff on your magic users - for example, Victor, Loy and Telle should be heavy on magic.
2. Make sure you have some steampunk guys on your team. Machine guns and flamethrowers help out a lot. If you didn't pick up Torry, you need to go back and get him. Train up his Luck, Agility, and Perception, so all his little hits have a chance to double or triple. He'll become a killing machine.
3. Make sure you have some of the merchant perks on a player, and have that player talk to the shop owners (you can switch after talking and still get the discounts). You can drop the prices almost in half.
4. Make sure you have leveled up Telle's healing spells, and have her stand out of the way and heal people (she'll auto-heal anyone with less than 50% hitpoints if you click the button).
5. Tried and true tactics: When you're in a big fight, Kill the healers first, then the magic users. Kill the tanks last.
6. Do all of the quests that don't interfere with your moral alignment. I'm going for a good character, so I didn't do things like kill the professors for the angry nobels son (which worked out well, I was able to intimidate him and he paid me money to not turn him in).
7. You can spawn enemies as often as you want, if you need to level up. Go to a "dangerous" place, and press the sleep button. You'll wake up surrounded by bad guys.
8. Make sure you pay attention to the mana and health heal rates. Your tanks shoul have the health regeneration rate as high as possible. Same with mana rates for your magic users.
9. Don't be afraid to use "big ticket" spells, and quaff mana potions if needed. For example, Victor can wipe out low level enemies in one fireball hit, and knock down a lot off high level monsters, before the fight even starts.
For those who haven't picked this up yet:
There seems to be a good/evil thing going on in the game. All of the "still" pictures that act as cut scenes seem to have victor with either Telle or Loy. When they show victor with Telle, he is clean cut and nice, and when they show him with Loy, he has a goatee (a true indicator of evil, if I've ever seen one. <g>). So I'm kind of sticking to good routes.
The fights with the Water Mages you really need to use strategy. The reason is that they like casting these spells that obscure them in mist, and it seems to increase their healing rate also. If you don't manually target people, your guys will fight whoever they feel like (a sure route to disaster in high level fights). So You have to really watch who you're fighting and clicking on.
I'm still enjoying the game, and the story is still interesting. There are still a lot of side quests. Telle and Loy seem to have some sort of trouble between them, so be sure to pick her up, for some fun (you can't miss her, you basically have to tell her to get lost if you don't want her in your party).
There have been a few glitches - sometimes (very rare) people get stuck, but you can select them manually and get them going again. There have been a couple of translation errors, and one spell description is completely in Russian! But nothing that has distracted from the game so far. I still recommend it. I'll post more as I get farther.
edit: If you haven't turned on "Show Items" in the settings, you may be missing a ton of drops from combat. I make most of my money by selling bandit equipment.