No, make sure you wait until the bowstring is fully tensioned all the way and aim a little higher.
Also you do not need headshots, you just need to hit any part of the body for the same amount of damage.
Yah, I got the hang of it last night. It's much easier in 1st person mode, the gameplay is kinda similar to a hunter in WoW, kite + shoot ,repeat. It's awesome game thou, I'm overwhelmed there is so much to do. I tried the second quest where you go in the gates of oblivion and got owned soon after as I only had 10 arrows left

My character is a Wood Elf and has his birth under the sign of shadow (60 second invisibility spell), Acrobatics, Marksman, Light Armour, Illusion, Blade, Mysticism and Personality I think. Do you think this is good?
By the way ,are the city guards killable ? (when you resist arrest)

Having a blast so far, only problem is, it's highly addictive.
Edit: How do you "sneak" ? I find enemies see me 50 yards away from them, sometimes even with chameleon on :S, is this something that becomes better as you level it?
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