[I wish my name was Baggins]

For the bandits portion of the game you have the option to either join the bandits (to the NE of the Friendly Arm) and infiltrate them from the inside. Or you can just walk up to their camp and start beating people like they stole something. After all they probably did cause they ARE bandits. I'm not sure if you get more XP for joining them because to be honest I never have being the Anti-Bandit guy that I am.

As far as Drizzt goes he is a dark elf master swordsman who takes the term tank to a new level. He is literally a one elf wrecking crew. As to how to kill him I can not say because I have never tried being a big fan of his since I read R.A.Salvatore's books on him. However, being the XP hound that I am I may just give it a try one of these days.