Chapter 1-2
Valley
This chapter immediately begins with a cutscene. Except that this cutscene is interactive. Make sure your ready to perform whatever actions appear on the screen.
After the cutscene ends, look around the current room. You'll find an item to grab. Leave through the only door in this room and you'll end up in a hallway. Walk through the hallway and you'll be greeted by a very short cutscene.
From this point on, the Merchant is open for business. He'll appear in specific places as you move through your adventure, and he is always waiting to sell you some new weaponry (and some other things). Head out the door, and around to the back of the house to find the Merchant. Talk to him to start shopping. Remember all those Spinels and various jewels collected during the first chapter? Well now you can sell them. Be sure not to sell the Beerstein though, it is not complete and won't yield you as much cash as it would when you are done with it. There are many other items that resemble the Beerstein (where you get the main item, but have to collect additional items to complete it), and you can tell which ones require some additional work by examining them. For your first purchases here, I recommend you pickup a 'Rifle' and the 'Village Map'. The Rifle is useful for picking off enemies at a distance, and is very powerful; the Village Map shows you the locations for just about everything, including rare treasures.
Once your done shopping, swing back around to the front of the house. When you get close enough to the large doors, a cutscene will play showing you your surroundings. Take note of the various places where your enemies are. Look left of the large gate, and you'll see a crack in the wall. Equip your rifle, and start cleaning out any enemies you can find through the crack.
When you are done, you can put away the rifle and equip any close-range weapon you may have. Open the gate and head out. Enemies will immediately notice you and will start heading in your direction. This is obviously not a good thing, so take out whoever comes to greet you (and pickup any items they drop). After you dispose of the first wave of enemies, more will come. Keep watch on all the walkways, cliff paths, and most importantly, the bridge. If you ever get overwhelmed, head back to the house you started at; the gates will slow down the villagers and will give you some time to recover. When things calm down a bit, you may want to equip your rifle again and pick off any enemies that you may have missed.
Now let's go and explore the cliffs (on the right side, when standing with your back toward the starting house). Follow the zig-zag path and once you reach the top, an additional wave of enemies should come at you from behind. Take them out, and collect the items they drop. Back on the top of the cliffs, there are a few items lying around, along with a treasure chest that contains a key item that you must collect. Grab everything, and head back down. Directly across the bridge are two houses. The house on the left is filled with enemies, so let's start there.
Head inside, and you start taking out any enemies that come at you. Aside from the items that the villagers drop, there are many others you can pickup, so thouroughly check the house for anything that might be helpful. There is a ladder in the house that will take you to the roof. If you haven't already killed him, you'll find a single villager standing guard up there. Show him your appreciate all his hard work. Up on this roof, you'll also find another treasure chest that contains the second and final key item for this area. Combine both halves of the object to form the Hexagonal Emblem; we'll be using this in a little bit. Leave the house so we can head to the next one.
If you didn't get rid of them, you'll find a few enemies patrolling this house. There is also an enemy standing guard above the roof on a platform. Relieve them of their duties, and then explore the house. There are a few items here, including one inside the a locker. Grab the items, head to the locked gate located near the last house, and use the Hexagonal Emblem to open it.
Village Storage
On the other side of the doors, start by heading forward. You'll come across another large door, but don't go in it yet. To the left and right of that large door and a few items to pickup. Once you've got them, head through the large door.
There isn't much in this room, except for a barrel that contains an item to pickup. Look around the room, and you should also find a window overlooking a tiny room that contains a rare item. Take note, as we'll be picking it up in a little bit. Go through the only other door available here to continue.
There are some enemies here, so take them out and continue onward, picking up items along the way. At the end of this room is a window, jump through the window to get to the next room.
If you are fast enough, try to take out the enemies before they can start throwing dynamite at you. If not, you should be quite safe behind the garbage dumpster. If you need cover, go behind the dumpster and press A.