Or both.

Of course, level-based systems have the distinct advantage of setting clear milestones for a character’s growth. Such milestones can be used as quick references when describing a situation to fellow gamers:

“So I had this level 13 Magic User that was investigating the ruins of an ancient monastery, when a freakin’ Gorgandour came ripping up out of the ground. I just about marinated myself!”

If the listener has an appreciation of what a Gorgandour and a 13th level Magic User are, the above statement means something. In a game like Call of Cthulhu, though, your description of your character isn’t likely to have a lot of relation to his power-level:

“So I had this biology professor on a research trip down in the Conga, when a Byhakee came swooping down through the canopy and tore his guide in half! The professor was in a padded room for five months!”

Well, any character would have been in a padded room for five months after such an ordeal. Skill-based systems tend towards characters that are either hideously over-powered or hideously under-powered. An exception is the RIFTS ruleset, in which a given character can be over or underpowered at 1st level, and gaining additional levels doesn’t really matter all that much.

The whole level-based stuff is kinda weak-sauce… The thing about palladium stuff was that once you folks had craeted level 1 characters, they were pretty bad ass, and I never really wanted to level them further. I think that feats are really cool, and I like the way d20 modern also gives set archetypes certain abilities… but more and more I wish everything was like the d20 cthulhu… offense or defense, and that’s it.