CRJ200 FLT CREW HAS AN ALT DEV DURING THE EWR DEP.

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OUR INITIAL CLEARANCE FROM EWR WAS NEWARK 7 DEP OFF RWY 22R; THEN AS FILED; EXCEPT MAINTAIN 2500 FT; AND EXPECT HIGHER IN 10 MINUTES. STANDARD PROCEDURES WERE FOLLOWED AND THE PROPER TAKEOFF BRIEFING WAS GIVEN BY MYSELF INCLUDING THE LEVEL OFF AT 2500 FT. I MADE THE DECISION THAT IT WOULD BE EASIER TO HAND FLY THE DEP. I TUNED THE LOCALIZER FOR RWY 22L FOR DME INFORMATION; AND SELECTED THE COURSE BUG TO 190 DEGS TO REMIND ME OF MY FIRST HEADING. THEN; SELECTED 220 DEGS TO THE HEADING WHICH WAS PLANNED TO REMIND ME TO TURN AT 2.3 DME. STANDARD PROCS WERE FOLLOWED ON TKOF. I CALLED FOR SPEED MODE AND HEADING MODE ON DEP. I REALIZED THE FLIGHT DIRECTOR WAS GIVING ME ERRONEOUS INFORMATION AND CHOSE NOT TO FOLLOW IT. I TURNED TO THE HEADING OF 190 DEGS; WHICH WAS SET IN THE COURSE BUG. FROM THEN I FOLLOWED THE DME OF THE LOCALIZER FOR INFORMATION ON WHEN TO TURN TO 220 DEGS. PRIMARY FOCUS WAS GIVEN TO THE HEADING AND ALTITUDE NOT ENOUGH. WHILE I WAS FOCUSED ON DME AND HEADING; THE CAPT WAS TRYING TO CALL DEP. WE BOTH HAD OUR PRIMARY ATTENTION AWAY FROM ALT WHICH CAUSED THE DEVIATION. SITUATIONAL AWARENESS IN MY OPINION; COULD'VE BEEN BETTER BY USE OF AUTOMATION AND AUTOPILOT RATHER THAN MAKING THE DECISION TO HAND FLY.