I'm not really new to D&D, though I haven't played in a while. I've gone through the old Infinity Engine games, and I am fairly familiar with 3rd edition rules. However, whenever I start up ToEE, either the Co8 mod or the regular game, I am just getting totally worked over in pretty much all fights I go into. The spiders in the Deklo Grove annihilate me. I took out one of the frogs at the Moathouse, but when two attacked at once I was done for. My attempt at the ogre cave was laughable. I seem to be getting absolutely nowhere in combat in this game. Am I just terrible, or am I supposed to be running around doing town quests to gain experience before I go into the combat quests? I have tried multiple different parties, with different alignments, and I've custom created different characters who all have great stats. This is really starting to annoy me. I have really been wanting to play a team based RPG lately, but I'm having so much trouble starting this game.
Do all the quests you can in Homlett you will gain a level and then you'll be surely able to kill the Deklo spiders. BTW. Learn to use 5foot step, a very good strategy when you do not want to provoke Attacks of Opportunity or to do a Full Attack on a monster when you have more than one Attack per round. It's also very useful to use Ready Action option or Full defence or fighting defensively. Hmmm you could always make a ranger whose favoured enemy are spiders.
It gets easier, but early on you do want to fight, rest, fight, rest a lot. And with the paucity of safe places to sleep, that means fight, go back to Homlett, fight, go back to Homlett. Do all the quests you can without leaving Homlett and you should be nearly, if not at, 2nd level. Proceed cautiously in the moathouse area until you've actually hit second level with everyone; you should be able to keep it down to one frog at a time. (And hit the moathouse courtyard at night, not during the day.) A fighter type with a two-handed weapon, high Strength and Cleave (requires being either human or an actual Fighter) at first level is very effective. Learn to use five-foot steps correctly and give everyone at least one rank of Tumble. Try to give everyone some way of attacking at range so that you're not screwed against those damn spiders, and even given that, don't even think about taking them on until second level. Use the one in the moathouse tower (also one of the few genuinely safe places to rest) as a dry run, use that for practice before going to the Deklo grove. And trust me, it does get easier.
I have to ask, What are your arcane spell casters doing? Spiders in the Grove and frogs are easily dispatched with a sleep spell. Do you even have a wizard? Are they wasting their spells on magic missiles?
I'd suggest making sure your support characters (wizards etc) have bows and bow-related feats like point blank shot, get a clean line of fire and don't fire over your melee characters (then the enemy gets +4 to AC due to cover, and another -4 to hit due to firing into melee - a first lvl characer attacking at -8 is generally gonna need a 20) and don't forget to flank the enemy with your melee characters for the +2 bonus.
Generally: 1) Complete all the Hommlet quests that don't involve leaving town. By the end, you'll be level 2 and potentially have a +1 Holy Longsword, a +1 Dagger, and a +1 Short Sword. You may also end up with a rolling pin. 2) Don't be afraid to hire Elmo the drunk. He's very well armed and armored, has a good load of HPs, and can generally serve as the perfect meat shield early in the game. 3) Sleep spells are your friend. A Wizard can scribe a load of sleep scrolls for 1 XP each, and each one has a decent chance of knocking out at least one enemy. Cure Light Wounds scrolls are also worth scribing if you have a Cleric or Druid with Scribe Scroll, as are Bless scrolls. ENtangle can be very useful if you arm your characters with missile weapons. More generally, read the in game help and learn what the low level spells can actually do. Some are remarkably useful throughout the game. 4) My Elves in the Temple thread has some early combat tactics illustrated in detail. Looking back, you can really hear the dice rolling in those sections, but they do show one basic approach to early combats.