The Bandit Camp
At this point most of your party should have between five and six thousand xp and be about 3rd level. We should now have what we need to tackle the pesky bandits. But, where to find them? Located on the second floor of Feldepost's Inn in Beregost is a mage called Tranzig. You can wring the information out of him before killing him for 975 xp, a ring of protection+1 and a wand of magic missiles. Parenthetically, also on the second floor of the Inn is a man named Algernon. If you pickpocket him you will steal his cloak which gives the wearer Charisma+2 and is the object of a quest picked up in the city of Baldur's Gate.
You may know where the camp is, but you still can't get there. How annoying! But, that's why I am here to help you. Head to the Friendly Arm Inn and rest. Then head east into the tile called Peldvale. Use your thief to hide in shadows and send him or her due north until the tile border and then due east until you see Raiken. While still hidden talk to him and tell him you wish to join his group and that you know that the only profit on the Sword Coast is with the bandits. He will take your party to the bandit camp where you will talk to Tazoc. You need to convince him you are OK. Be diplomatic, it's the best way. Once he thinks you are all right you will have infiltrated the camp and earned 400 xp. You can now walk about at your leisure here.
The place is crawling with bad guys. You can duke it out, not perhaps the smartest approach, or go right for the throat. In the end, either way you get there, your goal is Tazoc's tent which is the large building on the east side of the camp. Inside you will face your first really difficult battle. So, I'm here to help you cheat death once again!
It's time your mage finally earned his keep. He should drink the invisibility potion and equip the wand of Lightning Bolt you stole from the manor in Beregost and then go into the tent alone. At the door do not move, just talk to the person and then wait. You will see three bad guys highlighted red, but they can't see you so they will not attack. Use your wand on the mage at the left. The lightning will hit him, bounce and hit another bad guy in front of you! Do this twice to kill the mage and then once more to kill the man in front of you. Then target the knoll and kill him the same way. Now, move over to the right until you see the hobgoblin. Now it is time to bring in fresh troops, have the rest of the party come in and attack the Hobgoblin. Once you've won the battle save your game. You should find you earned 3750 xp and will find several scrolls, a mage robe of fire resistance, 10 arrows of ice and a couple healing potions on the bodies. Yummy.
Now talk to Ender Sai. It seems that the mystery is deeper than you thought. Use your thief to detect traps on the chest that was behind Ender. Then disarm the trap and take the loot inside... a whopping 2000 gp and several nice scrolls plus a letter that will send you into Chapter 4 and your next target, the Cloakwood.
I had a real hard time getting my mage to pull all the above off. So instead I entered the tent with all my guards and about 50 fire arrows. It took that to kill the three guys. Then I talked with Ender Sai and did the other stuff.
Before you leave the tent search the sacks and barrels to find another 700+ gp and a potion of magic blocking that will be useful later on.
When leaving the camp you can kill all the bandits if you choose, but it will be slightly tough sledding, there are some wickedly good bowmen here, or just leave to the west and the Friendly Arm Inn.
I next entered the tent guarded by three hobgoblins. Killed those guys. I then killed the three hobgoblins outside. I picked off all the rest of the bandits and hobgoblins.
Bandit camp Treasures:
On your map should now be a new entry, Cloakwood. This is the first of a series of areas that you must traverse to get to some Iron Mines that house a lot of bad guy higher-ups in the Iron Fist, the group behind the troubles on the Sword Coast. You can try tackling this now, but it gets pretty hard with lots of tough spiders, Etterlings, and some other things to worry about in a few areas. Rather than walk you through this part of the game, we'll leave you here. You can choose to go for it or adventure in the lands to build up experience. It's best to be at least 5th level all around by the Mines, so have fun and be safe in your travels! Suffice to say, you are well on your way to ultimate victory!
The Five Cloakwood Areas
Druids have a passion for the Cloakwood. Overlooking its minor inconveniences-such as deadly traps, wyverns, and bloodthirsty insects the size of a child's first pony-they apply such descriptive adjectives as "unspoiled", "peaceful", and "breathtaking". To me, the latter implies that druids have either a shared case of abject blindness, or a wicked sense of humor. Certainly, a novice forest explorer's first encounter with a live wyvern is almost certain to leave him breathless-and headless.
1. First Cloakwood
a. Aldeth Sashenstar in the center of the first Cloakwood area will ask for you aid against some druids. When Seniyad approaches, side with Aldeth and attack the druids. Speak to Aldeth again to receive a Potion of Heroism.
b. Gurke in the Jovial Juggler in Beregost will complain that his cloak was stollen by taslois in, ironically, Cloakwood. Travel to the first Cloakwood area on the fourth chapter and take the Cloak of Non-Detection from a Tasloi in the southeast corner of the area. Return the cloak to Gurke in Beregost and he will tell you to keep it.
2. Second Cloakwood Area: The second region of the Cloakwood is without a doubt the toughest. Assorted massive spiders have infested the place, and their friends the ettercaps have riddled the landscape with traps. Although there is quite a bit to this map, most of it is unnecessary to traverse. If you have some free time, however, chat with the frantic-looking man at the east side of the map. Tiber will ask you to find out what happened to his brother who went off to fight the spiders. Go west and enter the spider nest. Defeat Centeol and find Tiber's brother Chelak's body near the center of the web. Return Chelak's body to Tiber. The simplest way to get through this area is to cast Invisibility on Imoen and let her walk the trail to remove all emplaced traps., then have Imoen blaze a trap-free trail to the cave on the west side. Inside that cave is a powerful abomination, and killing her will net you an excellent sword. If you'd prefer to just move on, have Imoen clear a path from the east side to the north end, and then have the rest of the party follow with swords and bows a-plenty.
3. Third Cloakwood Area: Kill stuff
4. Fourth Cloakwood Area: Coran (who does not need to be in your party to complete this subquest) in the first Cloakwood area will tell you that the mayor of Beregost has offered 2000 gold for the head of the wyvern that has been plaguing the area. Coran. Continue through Cloakwood to the fourth area and defeat the Wyverns in the Wyvern nest on the east side of the area. Take one of the Wyverns' heads with you. Once you have left Cloakwood, speak to Keldath Ormlyr in the Temple east of Beregost to receive a 2000 gold reward.
Mines Area: The fifth Cloakwood
region contains the actual mining encampment, which is lightly
guarded until you reach the stable area. Before taking even the
first step into the stable courtyard, retrace your steps out of
the fort and let your party rest. You'll want a full complement
of spells and hit points before you take on the group attack that
awaits you therein. Once you return to the stables, you'll be
faced with several of the Iron Throne's finest. Target the spellcasters
first, preferably with Silence spells, and worry about the melee
fighters only after the mages are dead. Continue until you find
a raised building, and climb the steps.
This is where many players suggest you should finally part ways with Khalid (I got the first spiders in Beregost to do that) and Jaheira (I traded her for Branwen in Carnival after beating Nashkel Mines). Although they might be helpful to have along in the first part of the mine, the lower levels hold a far more congenial-and effective-companion. In addition, you'll want all the open item slots you can get for collecting loot in the mine, so just take Lady Sarcasm and The Wimp back to Beregost to drop them off, and sell any unnecessary stuff before you return to the Cloakwood and enter the Cloakwood Mines.
Getting extra money:
Got this stuff from the internet for my kids. Don't know the source or anymore - it seems to be gone.
During play press Crtl+Tab and a window will pop up. Hit enter and you get 500GP.