I don't much like that ability myself, and didn't pick it for my last playthrough, despite going with a mainly swordplay Geralt. How you use this is mentioned in the Tutorial though. When there is a special icon on your 'target', kind of like a sword with a line through it (iirc), then you can hit attack and you will counter him, causing lots of damage. The window isn't very long, but it can be useful. But I prefer to try to dodge and get a backstab instead, or simply block and hit back normally.
I wouldn't say the combat system in Witcher 2 is broken. I didn't like it at first, but got used to it. It's just a bit weird, because you basically have to roll around a lot - or get surrounded and killed. I liked the combat in Witcher 1 better overall. But I also have to say that with a swordplay build and the talents that injure several opponents (Whirl or Whirlwind or something like that) turns you into a pretty mean fella, and you'll slice through harpies, endregas and whatnot in no time.
Don't bother with arrow redirection or dagger throwing, and maybe not riposte either, and invest the talents into more direct damage and damage reduction, plus extra vitality. When you have 6-700 vitality you can take quite a beating without dying, and that helps if you get surrounded, or against those nasty wraiths.
Post edited August 29, 2016 by Pangaea666