I really don't like the treatment it received in the second game. The developer made it practically irrelevant as opposed to the central role it played in the Witcher 1 and that's playing on hard difficulty. Anyone tried an alchemy based build, perhaps I am missing something?

I'm playing one right now, and I can't complain. The lack of constant search for proper alocohol makes me more concentrate on combining different potions instead of worying about the limited supply of booze. And the shorter duration makes skills in the alchemy tree count more. Anyway if it takes me more than 5 minutes per fight I'm doing something else wrong.

If you want however, there's a mod to make the potions and oils last longer.

EDIT: Also, the use of bombs and traps makes me draw my sword only to be able to dodge sometimes ^.^

Alchemy builds are perfectly viable-certain potions, mutagens, and bombs can turn you into a powerhouse. I think it works just fine. You just don't get the really overpowered potions unless you go into alchemy, so it won't play a prominent role unless you want it too. TW1 was never a difficult game, and some of the potions you got access to made it even easier. That's not necessarily a bad thing, but I understand the reason it was balanced this way.

I think all skill trees are well-balanced. It prevents you to become a godmode player and force you to create tactics of your own.