Yeah, reloading was usually the way I went in those games.
Anyway, the damage system isn't quite as difficult as it first appears. It originates with pen and paper RPGs, though, which is why it calculates everything in dice. Basically, what you need to know, is that:
THAC0 = a characters chance to hit (lower = better, strangely enough)
AC = how well your character evades attacks (again, lower = better)
Damage = weapon base damage + strength modifier (higher = better)
d = die (as in dice, not cease to live)
The number after the "d" indicates how many sides the die has. 4 = four sides, 6 = six sides (i.e. a normal die), 8 = eight sides, etc. The number before the die is how many are rolled, usually one, but sometimes higher, especially with spells. So, 1d6 = one six sided die while 2d6 = two six sided dice.
So, if your weapon does 1d6 damage (i.e. you roll one six sided die to determine damage), a successful hit will deal 1-6 damage. If your strength is high enough, you will add a bonus to this damage. Looking at the players handbook for the actual pen and paper game, the damage bonus is as follows (assuming Baldur's gate using the same modifiers; I haven't played it in years, so I don't remember):
Strength:
8-15 = no damage bonus
16-17 = +1 damage
18 = +2 damage
18/01-18/75 = +3 damage
18/76-18/90 = +4 damage
18/91-18/99 = +5 damage
18/00 = +6 damage
19 = +7 damage
So, if you have a 1d6 damage weapon and 18 strength, you would do 3-8 damage per hit (1-6 for the weapon + 2 extra from your strength). Magic weapons also get a damage bonus. So, if your magic sword is 1d6+1, it does one extra point of magic damage per hit. If a weapon does 2d6 damage (i.e. two six sided dice are rolled), the damage range should be 2-12, rather than 1-12 since you can't roll a 1 if you have two dice.
Also, due to the way probability works, when rolling two six sided dice, you are more likely to get a number in the middle than a high or low one. So, you are less likely to get a 12 on 2d6 than on 1d12 (i.e. 1 twelve sided die). You are also less likely to get a 2, and you can't get a 1, so it evens out (this is all assuming that Baldur's Gate is simulating the probability generated by dice rolling, which may or may not be the case).
Wow, ok maybe that is complicated. Anyway, what you need to know about damage is that, in general, you want the number after the "d" to be higher. 1d8 is better than 1d6, and 1d6 is better than 1d4.