When the first guard dies against Stitches, the Town Crier yells a warning to everyone in Duskwood that an "abomination of the undead" is approaching.
It was common for a high-level player to single-handedly slay Stitches — taking the drama out of the situation. As of 0400 Cataclysm, the arrival of Stitches is phased content, so this no longer occurs.
Stitches can be kited to the town guards, and they will help kill him. However, if the player does not cause a significant amount of the damage done, he will not be able to loot Stitches' corpse. This is by design.
As of 0400 Cataclysm, he appears as part of phased content and Abercombie now rides on Stitches' shoulders. He spawns around the town hall as part of the [??] The Embalmer's Revenge quest. The whole town of Darkshire seems to be abandoned except for a few guards attacking the creature and most of the buildings are on fire during the entire quest.
The Night Watch Guard <Night Watch Guards> won't tank Stitches, but only make him 'busy'. There is no aggro table, just touch the abomination and he'll start attacking you. This also means that if you die fighting with Stitches, the Night Watch Guards don't let him evade or reset his health. So, hit him as hard as you can and if you die, just resurrect and fight again. Stitches will be there at the same point and with the same health he had when you died.