I'm familiar with how initiative works in PnP, but how does initiative work in BG2?

AFAIK, initiative determines your place in the attack round, when you can attack, how many times you can attack, that sort of thing. Things like strength, dexterity, AC, and class affect initiative. This is indicated by a number. Lowest initiative goes first.

As for reaction adjustment, I'm not sure how that works in PnP or in BG2. Does this mean how fast (or how slow) you react to enemies and whatnot?

Actually, IIRC, char with highest initiative goes first.

Initiative isn't the same thing here. In BG2, initiative is just a random modificator that slightly alters speed factor of a weapon or spell. Speed factor is better if lower.

I was talking of PnP, not BG.

Roll 1d10.

This number is added to a) the speed factor of a weapon or b) the casting time of a spell:

i.e.

A character with a dagger (speed factor 2) rolls a 6 on the d10. Therefore, his total is 8.

Boris the half-orc is concentrating on beheading our hero with a 2-handed sword. He rolls a 1 on the d10 - an excellent roll. However, when we add the speed factor of the 2-handed sword (it happens to be 10) Boris is found to be lacking.

Our hero stabs Boris for one point of damage, and Boris dies :D

Similarily, all spells have casting times. This works in an identical manner, with a 'casting time' being added to the 1d10 roll. e.g. Magic missile casting time = 1. Hold monster casting time = 5.

There are other modifiers to these rolls... for example:

Hasted: -2
Slowed: +2

And MANY others. I think (well, we played it this way in my p&p games) that each +1 of magical enchantment on a weapon reduced the initiative of attacking with that particular weapon by that amount.

Oh, almost forgot. Dexterity modifies Initiative as well, needless to say... the higher the dexterity, the earlier you attack.

Hope you found this informative :D

As a general rule, each +1 of enchantment reduces the weapon's speed factor by 1 (as compared with a non-enchanted version of that weapon), but there are lots of exceptions in SOA. Identify and carefully read the description of each weapon to find its speed factor, and then utilize as Dace De'Briago very nicely explained.

Thanks, everybody. Now it's time to apply my new-found information to my party order. :D

Which, as it happens, annoys the heck out of me. What's so great about weapons like Belm, Kundane, and most Daggers having Speed Factors of 0 if there are other weapons out there--huge weapons like Katanas--that do the exact same thing? If I had my way, all weapons of a certain type would all have the exact same Speed Factor, unless an altered Speed Factor was a specific part of that particular weapon's enchantments.

I think Katana's in specific are the big offender for that category, Six. For comparison, IIRC, for non-magical versions (forgive minor errors as this is off the top of my head at work, question marks where I'm less certain):

Weapon, Speed Factor, Damage
Dagger, 2, 1-4
Short Sword, 3, 1-6
Long Sword, 5, 1-8
Bastard Sword, 7, 2-8
Scimitar, 6?, 1-8 (I think speed factor is 6 or 7, but definitely worse than long sword which is 5)
Mace, 7, 2-7
Flail, 7, 2-7
Morning Star, 7, 2-8
Hammer, 4?, 2-5
Quarterstaff, 6?, 1-6
Two-Handed Sword, 10, 1-10
Halberd, 10, 1-10
Katana, 4, 1-10

Sing along with me: "Which one of these is NOT like the other..." Katanas, simply as a base weapon type, are absurdly overpowered relative to all the other weapon types. Tied as the most damaging base weapon type in the game, with a speed factor SIX faster than the other weapons doing that much damage, and it's even usable by thieves! And we haven't even mentioned the fact that on top of all that... it's ONE-HANDED!

The game designers clearly wanted to balance this by making Katana's less common and less heavily enchanted, but other than the fact that you can't kill Kangaxx the Demi-Lich with a Katana in SOA, I think it's pretty fair to say they didn't succeed. It's kinda silly reading the Katana description in the proficiency allocation screen while creating your character, and then immediately after starting the game and Imoen frees you, finding one in the first chest you open... and just goes downhill from there.

And we haven't even mentioned Celestial Fury yet...