Algernon's cloak is one of the very best items in the game. If you have a thief (or ranger) with respectable charisma put this cloak on him or her. Have the thief approach in stealth mode and charm one of the enemy; then have that charmed enemy attack the other enemies, thus drawing their much of fire. You could do the same with any character who's made invisible, of course. One very effective way to do this is to charm one enemy only at the edge of the fog of war and have that character initiate the attack for you. It's also for great for correcting pickpocketing failures. Even if your pickpocketing ability is low you can pretty much pickpocket all you want.
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