For story driven games like DOS, creating 1 character in single player mode makes the most sense to me. I like the old "create a party" games like the Bard's Tale series and SSI gold box from the past, but that was more about tactical balance than it was about the narrative. NWN2 was able to blend the two to some extent in Storm of Zehir and that was pretty interesting, but it doesn't really match the vision I'm seeing for DOS2.
So for DOS, I would say create 1 character per player (multiplayer should allow each real player the opportunity to create a character).
