Regardless of what you get out of playing RPGs, how much combat you prefer versus role-play, whether you are into intrigue and romance or the perfectly executed combination of feats to drive your enemies before you and hear the lamentations of their women ... ahem ... regardless of the why you play you probably expect that over the course of a campaign or series your character will develop and grow. That they will gain some form of experience, be it as a game currency to increase traits or give in-play boons or as a simple arbitrary metric toward the next plateau of power or level. Here's the thing though, there's more than one way to skin that proverbial cat (note: we do not condone skinning non-hypothetical cats, ed.) and show the mechanical growth of your characters.
When it comes to gaining experience there are two primary ideologies: Experience as Currency and
Experience as a Meta-Value.
Experience as Currency
Plenty of games use this method, with GMs rewarding players with experience points that they can use to buy advancements. In some games this is an entirely meta-activity only. Experience gains and spends are only ever carried out off frame in the world of the character sheet. It's pretty easy to balance the value of experience spends in this way. If an attribute contributes to five skills it should probably cost roughly five times as much experience to increase compared to the cost to increase a skill rank. Similarly "power" stats that grant access to new levels of player powers are probably going to cost more than simply increasing currently available abilities.
Other games gift broader importance to experience and add in a mechanical significance where the player can spend experience during play to enhance the character's abilities. Often this comes in the form of a re-roll, or possibly the purchase of an extra die (for dice pool systems), or some other bonus. This comes with a more difficult design challenge; how do you balance long term permanent advancement against short term character boosts? The cost to use experience to re-roll a failed roll, or add to a roll prior to rolling it needs to balance favorably against permanent advancement or the players will simply hoard their experience and forego those short term uses. Likewise it needs to avoid becoming overly favorable compared to advancement, usually this is easy, but it does bear noting.
These games tend to use modular character creation, whether that means a point buy system or a "building block" method that alllows choices from certain pre-defined packages, or even mixes of the two where character creation hybridizes the two. This gives the player more freedom but also has greater room for balance to go out the window.
Experience as a Meta-value
As common as currency based experience is, experience as a meta-value is probably the better known. The granddaddy of RPGs uses this method primarily (I seem to recall some magical crafting requires spending EXP in D&D) and plenty of newer systems do as well. You gain a certain amount of experience, usually determined by the GM, after each session. Once you pass a threshold value you advance in level and gain the associated benefits of that new level.
Balancing experience between characters in this game is a matter of understanding how characters accumulate experience and deciding how quickly characters should advance, and if they should do so at the same pace. The benefits are clear, advancement can be balanced directly and advancement is controlled specifically to set level benefits instead of a more customizeable piecemeal advancement.
These games tend to use character classes that pre-define many aspects of a character and minimize the player choice to perhaps an ability or two, or a selection of spells, and some may not even offer any customization. This limits the freedom the player has over their character but favors designed in balance.
What's it All Mean
So what, right? This isn't exactly rocket surgery. If you're familiar with RPGs you've definitely seen at least one of these and very likely both. It bears understanding however. As a player understanding how your game of choice controls character progression can help you make informed choices what whatever level of choice you are given. As GM it bears understanding the way your players' characters will advance and understanding what you may or may not be able to expect from that.
The other reason it helps to understand different character advancement systems is so you can find a game that fits your expectations. Perhaps you don't care about detailed customization of your character's abilities and just want something simple and straightforward. Or maybe you desire to be able to tinker and build exactly the character you have a vision for in your mind. These are just as important to some players as how the game plays and even what the game itself it about.
Did I miss something? Disagree with me? These are my thoughts but I welcome yours in the comments.