On xbox 360, if you hold down one of the colored buttons for a few seconds, a selection box will pop up where you can link that button to an item. I, for example, would use B for my sword and link A with my bow.
I tried to reveal as little as possible about the story line, but to be on the safe side I added a spoiler tag:
As for points, I like to start out focusing mainly on vitality and strength...course I tend to use melee more than magic or ranged weapons. Then start increasing dexterity, intelligence and spirit once I hit level 10 or so just to increase my ranged and magic armor multiplier and mana pool for use in dragon form.
If youre planning on using a bow a lot, then it would be wise to invest in dexterity so that you can upgrade your bows as you find them (high dexterity is almost always a requirement for upper level bows). IMO, the most important stat is vitality or life. Where you place stat points beyond that is really just according to personal preference and preferred fighting style.
A word of caution tho, there are some difficult close quarters fights later in the game where a bow may not be the most practical weapon.
As for skills, I like to keep around 5 points in reserve. That way, if I encounter a particularly hard opponent, I can reload a recent save and apply the points to a skill which would be a help in that fight.
Keep an eye out for skill and stat books for both human and dragon forms, there are quite a few and can be really helpful.
