Looks like I can change A and D to left and right arrows but I can't change W to the Up arrow nor S to the Down arrow.

Is something wrong with my game or is that by design?

That is rather odd...

ALthough it's possibly worth mentioning that the gamepad set up is actually really nice.

Yep, noticing the same thing ... Why in the F would you invalidate the up/down arrow keys ... I haven't ever used WSAD in a game (and didn't have to in the original game)....

Next patch supposed to add more mappable controls.
Hopefully, this will include NumPad and Cursor keys allowed as re-mappable.

About the Gamepad - it's fine for combat, but is garbage for Inventory Management.

Just, to be clear, if you're not computer illiterate, you can re-map whatever key you want in the ini files.

For those, who are, they are supposedly adding more options for keybinding in the Launcher's options in the upcoming patch.

More info, please...

You'll need to find the location of your saved games.
The default on Win7 is C:\Users\<your username>\Desktop\Documents\Witcher 2\Config.
Remap the keys in User.ini (use DIMapping.ini as a reference).

I haven't mapped these particular keys myself so I don't know if this will work, but in theory you should be able to something like this in User.ini:

Replace IK_W=(Gamekey=GI_AxisLeftY,Value=1.000000)
with IK_Up=(Gamekey=GI_AxisLeftY,Value=1.000000)

Do the same for the ASD keys replacing the letter with Left, Down, and Right respectively.

What I'd like to do is...
Put Cursors keys for movements and all the "Gamepad" keys onto the NumPad.
I'm gonna have to look at these INI files and see if it's easy enough to mod...
Thanx.

You can play with the gamepad and use the keyboard for the inventory. Just hit the insert key to switch back and forth.
The easiest INI file to edit is DIMapping. The IK entries are your keyboard keys and the DIK ones are the game inputs. Swap the IK entries for the keys you would like to perform the action of that DIK. For example, this will change forward movement to the up key, DIK_W=IK_UP.