Abilities and balancing combat

[grod the giant]

I'm working on a short, slightly unconventional RPG for a school porject, but I'm having a lot of trouble figuring out how to balance the combat.
Currently, I plan the game to span five levels, but- and this is the complicated parts- with dramatic power leaps upon reaching levels 2 and 4 (for story reasons).  Also, party size and composition vary greatly across the five levels, each of which contains one dungeon.
I decided to have the PCs level up at specific points (generally after finishing their quest/defeating a boss), which frees me from trying to figure out what level they would be at at any given point, but I don't know how to stat out the monsters.  Please help!

[Sirius]

Trial and error is your best friend in this case. If you know what level your characters will be and what equipment they'll have, then set up a few test monster groups (Monster group tab, increase array size, add monsters, success!). Mess around with enemy stats until the battles are appropriately difficult (but not ridiculously long), and voila, balanced combat.

Let's hope I understood your question. If you're talking about something completely different, just say so and I'll see what I can do 

[grod the giant]

Do you have any guidelines?  I was trying to come up with some algorithms for player damage vs monster health, but then I started getting confused and decided to ask for help...

[Sirius]

Algorithms and such are nice, but they serve the same purpose as just messing around with the database. Again, as long as you can make the battles fun, anything works. So say you want your characters around level 10 for the second level with 600-800 hp each, doing maybe 50 damage per hit. Set up as many enemies as you want, and make it so that 2-3 hits will kill them, or fewer with skills. Test the battle, and if it's too easy (Characters losing something like 10 hp), bump up enemy attack. If it's too hard (Characters losing 200-300, remember, they have to go through numerous fights without an inn, unless that's how your game works), then lower attack, etc. As far as I'm concerned, the real science behind combat is fairly nonexistent unless you're willing to spend a long time on it.