Most of the upgrades are in really obvious places, I'm talking spots where you absolutely MUST go in order to advance the plot "normally". Not all of them of course, but just keep an eye out and that alt key pressed.
Of course, the kit weapon upgrades all SUCK. The main problem is that they cannot be upgraded through normal crafting. No whetstone, moonstone, bowstring, tormented soul, or elemental essence additions. Their base stats do NOT make up for the lack, and they require crafting skills to put together anyway.
I did find that the base kit weapons were useful for a level or two. At the level you can buy them at you probably don't have the crafting skills or materials to make anything better, plus you can get them when they are still a couple levels higher than you are, which has its benefits. The upgrades almost always end up lower level than your characters when you find them.