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Part of the explanation is resource management. Parties are supposed to be able to deal with a number of encounters of the particular level before growing tired. If each encounter is life and death then they will finish 1 or 2 encounters and be spent. That's not as much fun as doing 7-8 encounters and then starting to look ragged.
The other thing to consider is number of actions (and the chance for a critical). A party of 4 will at 1st level have 4 total actions. A group of 2 orcs will have 2. By increasing the number of actions/attacks that the opponents have, the chance of something bad happening to the party increases as well. With 2 orcs you have a 1 in 10 chance each round of scoring a critical on the party. With 4 orcs it is 1 in 5. 8 kobolds might not seem like much of a threat but with 8 attacks there is a close to 50/50 chance that one of those kobolds is going to hit with a critical and severly hurt the pc. # of actions has other ramifications, the critical thing is just the most obvious. You can throw larger groups at your PCs and they will survive but it will wear them out a lot faster and increase the chance of PC death.
I've been DMing and making my own encounters since 3.0 hit the stores, (and for two decades before that as well) so I'll see if I can help you with this.
Looking at the DMG, it says that an ECL 1 encounter would be 2 1/2 creatures (if I'm reading the chart correctly). The thing is, I know 4 characters can wipe 2 orcs out with no problem, so I don't see that as very balance...is there something I'm missing or not reading right?
Just so I know I'm understanding your question, this bit I quoted references the 3.5 DMG on pages 49-50, right? And you're talking about using two CR 0.5 creatures to make an encounter of EL 1 to challenge a party of level 1, right?
A few things to remember:
1. The orc in the Monster Manual has a 17 STR wielding a falchion for 2d4+4 on every hit. That's an average of 9 HP per hit, capable of 12, and they will score a critical hit surprisingly often, dishing out an average of 18 HP when they do. This kind of damage can kill a level 1 character very very easily. So a traidional party with fighter, rogue, cleric, and mage walk around a corner and encounter two orcs just 20' away. The orcs win initiative and both move up to attack the fighter. His flatfooted AC is 17. Two attacks at +4 means they each need to roll a 14 or higher to hit that fighter. That's about 1 chance in 6 that they both hit before the fighter ever even moves, and they'll do about 18 points of damage if this happens. Dead fighter. No, you don't want this to happen, but it could, which is why even two orcs might be a challenge for a level 1 party of four.
2. Even if those orcs don't kill the fighter immediately, the odds are about 2 chances in 3 that at least one of thiem will hit that fighter for around 9 HP in the first round. Now he's very near death. The party tries to kill those orcs in round 1, but the odds are that they won't kill both of them. So whatever orc(s) are left standing can attack the fighter again in round 2, and maybe even round 3 or 4. That can add up to lots of damage for the fighter. Sure, the cleric will be healing him - but he only has just so many spells. If the level 1 party rolls too many low rolls on their d20, or if the orcs get too many high rolls, this could be a dead fighter.
3. Even if the party handles those two orcs well enough, they probably took some damage and used some cleric healing. The mage might have used one of his few spells to help finish the fight too.
4. In conjunction with point 3, remember that the CR and EL system is set up with the premise that the party should be able to fight 4 encounters in a single day without resting. So the first and second time they fight a pair of orcs, those two fights go fairly easily, but the cleric is now out of heals and the mage just has one Magic Missile left. The third encounter with two orcs is tough, and now the Magic Missile is gone and the fighter is down to 8 HP. That fourth encounter with two orcs might be a doozey.
5. Don't forget table 3-2 on page 49 of the DMG. 15% of the encounters they face should be EL 2, 3, 4, or 5 (I personally would not go higher than EL 3 for a level one party). Those are going to be really interesting. Four orcs is an encounter of EL 3; if two orcs have the possibility of killing the fighter, imagine what four orcs could do to him. And 5% of this party's encounters should be EL 6 or higher (I would ignore this for now - using encounters that are 3, 4, or 5 levels higher than the party is really fun when they are, for example, 10th level, but doing it at level 1 will just kill them).
6. I keep using orcs, but you probably won't, unless you're running them through an orc lair or something, and even then, some encounters might be with goblin servants, hobgoblin emissaries, wolves, traps, some human brigands trying to hire orcs as mercenaries, maybe an orc leader with a couple levels of barbarian or an orc shaman with a couple levels of cleric, maybe something really strange like undead or spiders or something else you just don't expect in an orc lair. But the rules are the same - about four encounters a day (more if they are easy, less if they are extra challenging) and each encounter should be around EL 1 unless you're deliberately changing the difficulty and the number of encounters this day).
7. Nothing I have said is an absolute rule. It's all guidelines. If your PCs have really high ability scores, then challenge them a bit more. If they have a weak group (two rogues, a druid, and a bard), then challenge them less. If the players are smart and work together as a team, challenge them more. If they do stupid stuff and can't grasp the basic concept of teamwork, challenge them less (and gradually teach them the error of their ways). Stick a 5th or even a 6th encounter in there once in a while, if you think they can handle it. Likewise, only give them a couple normal encounters some days (it's funny when the casters go to sleep at night with all their spells sitll prepared because they "saved" their spells during the encounters and ended up never using them). Aside from being funny, it makes the world seem more natural, and a whole lot less predictable, if everything doesn't happen in groups of four all the time.
Hopefully that sheds a little light on how this all works.
It's bound to take some time, and some practice, before everything clicks together. But trust me, it will all click together in time. Unless, of course, (to be quite blunt), you're not cut out for DMing (not everyone is) - no, I'm not saying that you aren't (you probably are, actually, since you're here getting your facts straight), I'm just saying that some people aren't, and if this stuff never clicks even after using it for a long time, then maybe that person, whoever it is, is one of those who isn't cut out for DMing.
So for now, use it as written. See what happens. Don't be afraid to improvise. Plan for 4 encounters the first day, but write up 6 or 7 encounters, and be ready to use them. If an encounter is supposed to be two orcs, then write it up as two orcs, but also add a 3rd orc in your notes, but only use the 3rd orc if the battle seems to easy (he arrives late, drawn by all the noise) or maybe use the 3rd orc if this isn't your first encounter and all the other encounters today went really easy. In other words, plan for the ability to alter things on-the-fly, but for the most part, just follow the DMG's guidelines and get used to the EL system for now. I think, in the end, you'll find it works fairly well.
I was going to put them up against a lvl3 Rogue, and a couple of lvl1 goons because I'm sadistic like that. I'll drop the 3 to a 2 and that should about even it out, correct? Since 1 + 1 + 1 + 1 = 4 / 4 = 1 and 2 + 1 + 1 = 4 / 3 = 1.33~.
Be very careful with that.
Don't guess what the EL will be. In this case, your guess is way off. This encounter is EL 4, not EL 1.33.
Look at Table 3-1 in the DMG (page 49). The last column is "Mixed Pair". A level 3 and a level 1 (your rogue and just one goon) is an EL 4 encounter.
Your two goons, by themselves, are EL 2 all by themselves. To figure this out, look at the table. Find "Number of Creatures" across the top and look for 2, since we're talking about two goons. Then go down that column until you find the entry that matches their CR (or level). Since they are level one, we go down the "2" column until we find the "1" entry. It's the second row. Then follow that row back to the left to find out the Encounter Level (first column) which, in this case, is EL 2.
Now that we know the two goons are EL 2, we can add in the rogue. If we drop him to level 2, we now have two level 2 encounters here that we are combining into a single encounter. Back to the table, we find the "2" column again, since we have two separate encounters, and we go down the column until we find the "2" in the column, since both of our separate encounters are level 2. It's not the third row, since that says "1,2" meaning a level 1 encounter and a level 2 encounter. So we continue to the fourth row where we find a 2. This means 2 encounters of level 2. Reading across to the left, we find that this encounter is EL 4.
EL 4 is very tough for first level characters. You might kill some of them unless you play the bad guys very stupidly (remember, they want to live, they aren't suicidal, they will use the best tactics that they are able to understand - if they don't, then good players will feel like you cheated them by making it too easy).
So, if you really want them to face this EL 4 encounter, then you might want to deliberately make it easier on them without looking like you're cheating. For example, the rogue is asleep and wakes up on round 1, grabs his weapon on round 2, and doesn't enter the encounter until round 3 (by then the goons should be handled and now the party can concentrate solely on the rogue). Or have them discover the enemies while the rogue is working on his crossbow with a wrench and screwdriver, apparently trying to repair it. Round one he hurries and finishes while his goons engage the party. Round two he cocks the crossbow. Round three he tries to fire it but it falls apart (his repair job didn't work). Round four he throws it away, draws his sword, and charges into battle.
Or, let them face it full on, with all the bad guys ready to leap into the fray with no limitation, but make sure the party is well-rested, has all their spells, and won't be epxected to face any other encounters today. Even so, be prepared to kill a PC or two unless you want to cheat on your secret die rolls (you may not need to cheat, and you might not kill anyone if you don't cheat, but you also might kill them with this encounter - dice are funny that way).
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To kind of add on.
Your average party, meeting an average encounter will, more often than not finish it off quite easily. This will lead you to think that the encounter was too easy. But the truth is, the deck is stacked in your parties favor and the dice happened to fall their way. A few bad rolls on the same encounter and the party will take some noticeable damage but still survive.
When you raise the threat, so that the average party has a tough time of it, even when the dice are falling well, what you have also done is insure that a few bad rolls spell serious trouble and potential death.
Raise the threat just a little higher and all of a sudden the deck is stacked against your party and they will only win if the dice fall entirely their way.
Thats not saying that the second and third option always make for a bad encounter. Your final encounter should almost always be 2-3 CRs above party level to make it memorable. But if you do this for every encounter you've gone from memorable to frustrating.
For your average encounter, aim for a CR within 1 of the Party level (either over, above or on). For an easy encounter go for 2-3 CRs below the party level (or more). For a tough encounter, go 2 CRs above the party level. For a deadly encounter go for 3 CRs above party level. Going more than that and you're just being sadistic. :)
