NMAC AS COMMUTER IS ON TKOF AND VFR TFC APCHING.

Narrative

FLT WAS CLRED FOR TKOF AND WAS ADVISED OF AN INBOUND VFR ACFT THAT HAD RPTED 5 MI TO THE W. WE DEPARTED RWY 21 AND DECIDED AN EARLY TURN TO OUR DEP COURSE WOULD BE BEST DUE TO THE LACK OF RADAR AT APPLETON. BASED ON THE RPTED POS OF THE VFR ACFT INBOUND WE BELIEVED THIS WOULD BE THE BEST WAY TO AVOID THAT ACFT. OUR COURSE WAS TO THE NW. SO WE BEGAN A R TURN AT APPROX 400 FT AGL. I WAS THE FO AND WAS LOOKING IN THE DIRECTION OF OUR TURN VERIFYING THAT THE AREA WAS CLR. AT THAT POINT THE CAPT UTTERED AN EXCLAMATION. I GLANCED AHEAD AND SAW THE TFC AT 11:30-12 O'CLOCK AND SLIGHTLY ABOVE THE HORIZON; DIRECTLY IN OUR PATH AND HDG RIGHT AT US! THE CAPT HAD ALREADY REDUCED PWR AND HAD BEGUN A DIVING R TURN AT WHICH TIME THE VFR ACFT ALSO BEGAN EVASIVE ACTION. AFTER RESUMING OUR DEP COURSE WE ASKED TWR WHERE THAT ACFT HAD COME FROM AND HE TOLD US THAT HE HAD NO RADAR AND HAD TO RELY ON PIREPS. THIS NEAR MISS (WE WERE WITHIN 500 FT) WAS A DIRECT RESULT OF NO RADAR AT ATW AND POOR PLT RPTING BY A VFR ACFT. ATW WOULD DEFINITELY BE A SAFER ARPT IF THEY WERE EQUIPPED WITH RADAR IN THE CTL TWR.