When is the ideal time to do watchers keep? I didn't do it at the beginning, before going on the extended road trip, but I think i'll be back to the main land soon. Should I just wait until throne of bhaal, do it before end of SoA or is it best done early in the game and I should just hit it on my next play through?
GamerTag: Crockadock Tell the New Age to give me a call when its old enough to drink
The first level is fairly easy (if you have some way of dealing with level drain) and there are a couple of really nice items you can get (a +3 returning dart, a +1 quiver and a +1 case of bolts,) plus you can buy the Firetooth crossbow from one of the knights, although it's very expensive. You should be able to go there and deal with the first level without a lot of problems as soon as you exit Chateau Irenicus (and have a full party).
The second level can be difficult, but with some planning it's not that bad. I recommend waiting until you finish at least a couple quests, though.
The third level is harder than the second. I'd suggest either waiting until you exit the underdark, or if you're thorough, finishing all the quests you can in chapter 2. It should be at the very least manageable by that time.
I think level 4 and below shouldn't be attempted until after you leave the underdark. There are some REALLY nasty monsters there, and you're going to want to have the experience and treasure from Spellhold and the undedark, (and possibly the sahuagin city) to help you survive.
The fifth level can be done before you fight Irenicus for the last time, but I don't know if I'd really recommend it. It should be doable by the time you gain access to Watcher's Keep from ToB, though.