If you use the right items/strategies you can kill him long before Ch6.
I thought this had gone up in the strategies section, but since I don't see it there I'll re-write it with new observations.
Normal liches including the ones with the golden arms/legs are ridiculously easy if you just use Protection from Undead. However, if you use this with Kangaxx the Lich it results in a bug whereby he never dies so the Demi-Lich never shows up. So, don't do this!
Kill Kangaxx the Lich the same way you would any powerful mage. If you're planning to use Protection from Magic for the Demilich you can activate it now as it should last plenty long enough...unless you want to hit the Twisted Rune with it afterwards which I often do. However, I want to focus this on the Demilich.
The problems with killing the Demilich are two-fold. 1) Damaging him 2) Staying alive against his Imprisonments and Howl of the Demiliches.Damaging Him:
Kangaxx can be hurt only by weapons of +4 or better enchantment level. Pre-underdark this means: Carsomyr, Sling of Everard, Staff of Magi, Staff of Rynn, Flametongue, and the Mace of Disruption. Daystar works great against normal liches but didn't seem to work on the Demilich for me. Post-underdark you have plenty of options.
He is mostly immune to spells, but powerful summoned creatures can harm him (Fire Elementals, etc) as can Melf's Minute Meteors (count as +5 weapons). He will also take damage from the Ring of the Ram and Thief Traps.
He doesn't have a lot of hp, but most attacks only do a few points of damage and he regenerates pretty quickly (ring) so you need to hit hard and fast.Stayin' Alive
Although powerful, his attack is very one sided so easy to avoid. From most effective to least.
Slayer: Immune to both spells and can kill the Demilich all in one package. Down side is rep loss and only post-underdark.
Protection from Magic Scrolls: Shields you completely from both his spells and lasts a long time. There are only two, but you can get around that with Project Image or Simulacrum either cast directly, from scroll, or from Vailor's Helm.
Berzerker Enrage: Shorter duration so you have to kill him quickly or have another way of protecting yourself. Multiple berzerkers can tag-team. Does not protect against Demilich Howl, but if you have decent saves you should be ok. Note -- Not Barbarian Rage.
Spell Immunity Abjuration: Same problems as Enrage but can only be cast by a mage on himself. Can be combined with Spell Immunity Necromancy or Death Ward to protect against the Howl.
Wizard Eye: Immune to both spells although it has no attack of its own. If you're killing him from a distance (MMM's, etc) may be usable but risky if you're planning to melee him. Combines well with the Fire Elementals below.
Swarm of Fire Elementals: Using the Staff of Fire you should be able to attack him with Fire Elementals as quickly as he can get rid of them. This provides both offense and defense, but can be tricky to pull off.