We started up out campaign last night, and only managed to play one level of the first Dungeon sue mainly to setting up, and rules/learning (a lot of looking up stuff). I was disheartened as I saw my heroes start up three CT4 characters, amongst them two av4 tanks, one with 3, and one with 2... but 4 against missiles. So much for my SK/sniping skeleton plan!.
In the end I did all right, but only because of the HORROR that IS a master demon with 1 one extra armour and eight extra wounds... Almost impossible to kill with shop ad two bronze items... the fight dragged out so long that I eventually got to flip the spawn counter a couple of times and managed to kill off even one of the tanks a couple of times.

Still I have a few things I'd like to get clarified.

1) When drawing/setting up the dungeon level... should the heroes be allowed to see the "special rules" regarding the level? or should they only be read the "fluff" story assorted with it ? (the summoning of the demon, that caused the heroes so much grief could have easily been prevented had the players known what was going on)
I found this to be such a big issue that I discussed the matter with the players before we started. And we came to the conclusion that they should NOT be told. That way they couldn't blame me for keeping info from them later . Though we play very competitively, I still want to help out the players as much as possible, with regards to how the rules work.

2) Sore/Fly. The demon had sore ability. and the rules state that therefore it too has fly. Now, since the sore ability only work during outside encounters, it was argued that so would the FLY ability only be applied outside as well. is this true?

3) Taunt. We had a bit of trouble as to how this skill actually worked. And we changed our use of it several times during the evening.
By now my impression is that it works as follows : You are able to move monsters around as normal, and when done you declare which hero you want to attack. Then check to see if the Taunt skill applies, that is to say, if you are making a melee attack, you can do so as you wish as long as you are not (in range/next to) the Hero with taunt.
Ranged/Magic attacks made from WITHIN 5 squares of the taunter must be directed towards him. But if the ATTACKING monster is further away than 5 squares(at the time of the attack) he can attack any model, regardless of the "victims" proximity to the taunter.
You cannot choose not to use the "sniper" ability, but MUST use it in order to target the Taunter.
Is this correct?

Krede said:

1. All text on the dungeon cards (special rules etc) is public.
RtL pg17
Finally, the overlord reads aloud the dungeon level description (found in the Quest Guide, next to the map), as well as the entire Dungeon Level card , including all “special” and “leader” text.

2. You have it the wrong way round. All monsters with Fly automatically get Soar. Monsters with Soar do not automatically get fly. The thematic reason they don't get fly is that they are too large to fly inside the dungeons.|
RtL pg29 (fly) and pg30 (soar
All monsters with the Flying ability automatically have the Soar ability as well.

3. Your impression is correct. Taunt only takes affect when an attack is declared, and only affects attackers within 5 spaces (of the Taunter) who are able to attack the taunter.
Taunt
When an enemy figure (within 5 spaces of you ) ( declares an attack) , but before dice are rolled, you may force the figure to target you with that attack if it is able to do so . (brackets added to separate two distinct relevant phrases).
The sniper answer is in the FAQ pg14
Q: Sorcerer King Overlord Upgrade - Snipers: Can skeletons be forced to use this ability (ignore one obstacle/ figure blocking line of sight) to target a Hero using the Taunt skill that they couldn't otherwise target?
A: Yes, if they can draw line of sight (after using the sniper upgrade) then they must target that hero.

Did you still end up going with the SK/Sniper combo? The last RtL campaign I played as a hero our OL, we had similar armor values and it didn't really matter. Sniper takes away lots of hiding places, and the Pierce on Skeletons helps, especially once you get them to Silver.

Yep I went with the SK/sniper combo And it is incredible how much stuff you can miss even when it is right in front of you in the rules!!