In my current game, my PC is a 14th lvl Elven Archer w/19 dexterity. I started him with Grandmastery in Longbow (he rarely, if ever, fights hand-to-hand). Average damage seems to be around 15, with critical hits approaching 25. Dexterity bonus + GM bonus + kit bonus = he hits almost every time. His THACO is -8 right now. For fun I will have him enter most areas first and try to take everything out via sniper tactics (let off a few arrows, run around the corner, hide in shadows, run to a different area and start all over again). Boots of Speed definitely help.
I'm guessing that you just started out with the character. If you are a powergamer or just like full-bore hack-and-slash, the archer may be a bit boring to you. Personally I am enjoying this character and can see why Dundee and others have gone solo with it.
As you go through game you'll find more than enough +1 arrows and such... but I agree that you should use non-magical arrows if at all possible. As for the fire arrows you can get during Nalia's quest... I think I got close to 200.
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