A lot has been said about the combat difficulty, and I think that's because people are approaching the combat from too much of a traditional point of view. So I'll give you some tips to make your lives a lot easier and you'll find that there's actually a bit of strategy and thought required to win some of the harder battles (of which there are a lot).
Potions, potions, and more potions. Most people complaining about combat will be ignoring drinking potions before battle. The character of Witchers is that they use mutagens and potions to augment their combat abilities making them faster, stronger, and smarter in battle. The game tells you about potions early on, and when you enter that meditation state you will find you can drink three at a time - well clearly they know you're going to be needing to drink three at a time very often. The goods required to make potions are readily available in the wild and in homes and shops. Atleast drink a Swallow (to increase vitality) and a strengthening potion before battle, drink another to increase sign power if needed.
The best weapons and armour have to be crafted. A lot of people have complained there's no storage, but they're carrying arounf 75 planks of timber and 55 iron ores. Everyone around town sells diagrams, and you find a few a long the way. At the town smithy you can see the stats of the weapon or armour before you craft it to compare to your current equipment. Don't be afraid to upgrade and spend coin! You get a lot of junk along the road to sell, and there's no sense in having 75 planks of timber. Sell your junk!
So now you have potions, and better equipment, you're looking in much better shape already. Third tip involves battle technique. Parry! I cannot stress the default E button enough, you will not survive if you don't parry. For research see how much a hit damages without parrying, and then see how much a parried blow hurts. The difference is staggering. In some fights 5 solid blows will kill you, but you could sustain 35 parried blows. You get a skill early on in the "training" tier that allows you to parry from all sides, it's invaluable and should be gotten asap (level 2), no more crippling back attack combos! Parry shieled opponent strikes to throw them off balance and smash them with heavy blows (time your blows for combos). If you still find yourself too outnumbered and losing health, cast Quen, it's a shield. With that shield up, you can run around the battlefield while Swallow increases your health.
Potions, better equipment, parry, and Quen. You will find yourselves living a lot longer. You'll note I didn't mention dodge. It's no overly effective and often leaves you open to attack instead of dodging it, especially when crowded. It's handy against a single shielded opponent, but not much else.
You know what's great for crowd control? Bombs. I forgot to mention bombs which you can craft by the plenty. You get crowded by 5-6 guys, get out of there turn around and throw a bomb at them. It damages and spreads the pack.
Another point is closing distances. Quick attacks can be launched from a distance and Geralt will automatically close the gap between you and the opponent and launch the strike. On the other hand heavy stikes will be performed from where Geralt is. You leave yourself open when missing a heavy strike, so close the gap with a quick strike and then launch the heavy. Miss up your strikes, the combat system is very versatile allowing you to perform any mix of quick and heavy that your combat situation calls for.
I have a question about this parry from all sides talent...
Does it mean that if I press parry and someone hits me in the back I still parry it instead of taking damage? Cuz It didn't seem to work that way... Although I'm still in the beginning of the game and have tried it enough (maybe only once or twice) and I might have even timed it wrong... Therefor I could very well be wrong :P