Below is the 4 person party I used on insane difficulty and Heart of Fury mode once I got a decent level. It is well balanced, except for a lack of thieving skills, which really doesn't matter much; simply tank or ignore the traps and use knock on anything locked. You can get to the 8 million experience cap with a party of four with one full play through (IWD + HOF), but you will have to do Heart of Fury mode for a good chunk of it. I would like to hear your thoughts on this or what you did for a smaller party.
Human Inquisitor - The true Wizard Slayer. The Inquisitor is so good at demolishing wizard, cleric, and thief defenses and elusiveness that it actually allows you to skip placing your sorcerer spell slots into breach, true sight, and other spells that are aimed at cutting down wizard defenses. Like all Paladins, the Inquisitor is also a balanced warrior that does well in both melee and ranged combat.
Human Berserker / Cleric - The ultimate melee warrior and tank, although the B/C takes a while to reach maximum potential, once fully dual-classed it's amazing how much punishment this guy can take. Cleric spells are so good in IWD compared to BG2 and allow you to get amazingly good defenses that far exceed the potential of any Barbarian or Dwarven Defender as well as great offense and saves. I dual - wielded him in morning star / flails.
Elf Archer - Pure DPS, basically a ranged form of the Kensai. Very few things in IWD require magical weapons to hit them (even the end boss), and if they do +2 is sufficient (undead), so you'll rarely be in a situation where you have to go into melee mode. The Archer also gets access to Druid spells. I focused on longbow for the extra attack per round.
Elf Sorcerer - Great for support, control, and damage...whatever you want. Be sure to get the level two Knock spell because you don't have a thief.
Ranged attack is king. Summon fodder, send out your enraged B/C, and let the other party members pelt them from afar. Haste, and later Improved Haste is essential as it essentially doubles your physical DPS, general pre-combat buffing is also recommended for Heart of Fury mode.
For a party of three I would ditch the Inquisitor and just rely on the B/Cs and Mage's Dispel magic. You'll also probably want to pickup spell thrust, breach, and a few other similar spells with your sorcerer. Going Kensai / Mage instead of Sorcerer wouldn't be a bad idea either.