I have just started chapter 3 and I am in the docks area. The game manual states that NPC Edwin is here somewhere but I can't seem to find him. Has anyone found him? He looks as though he might be a good addition to the party.

He is. Talk to Bloodscalp, bust into the Mae'Var guild for him, meet Mae'Var, get a quest from him, finish it, he'll let you meet Edwin then I think. But, you need to do a quest for Edwin--kill some guy--then do another quest--kill yet another guy--THEN do a final quest for Mae'Var. After that talk to Edwin, and you'll get another quest to do but you also can get him into your group at that time also.