Ok, so subtitle is a bit harsh and not actually true... You know.. Not ENTIRELY true. 
As discussed in the impressions thread I posted though, seems I'm not alone in thinking that level-ups mean next to nothing as they stand. A single potion/book = a whole level, and they are currently excessively available!
Actually going to straight quote my levelling section from that thread, as the main suggestions I had are already posted there. If you read the impressions thread and have seen this already, skip below the quoted section:
Levelling up at the moment is really really underwhelming. Don't get me wrong, I'm not advocating some power curve so steep that a level 4 will always wipe the floor with a level 1 regardless of anything else. But currently the curve is so shallow as to almost not bother. Sure, I guess by level 20 or so you would see really quite a significant difference over where you started.. But anyone want to put a wager on a Lev 20 sov vs a Lev 1-3 Sov that has done the wolf quest?
As it stands, you gain SIGNIFICANTLY more power from books/potions/items that you find about the place than you do levelling up. Level means essentially nothing. It's not useful for guiding your decision on relative power at all.
Suggestion? (Although it's just one of several possible solutions)
Make it so that where items are concerned, they cannot increase your stats by more than 50% of base. For instance, if you have 10 hp and find a ring of fortitude, it'll buff you to 15 hp, but will scale with your level and that base value increases. (Up to a maximum of 20hp or whatever the item has).
Exception to this rule being if your base value is <2. If base value is under two, it can bring you up to 2. But it won't go beyond that point until your base value warrants it. i.e., if your base value becomes 2, the item can then buff you by 50% of that, for a total of 3. For example, you have 0 attack power, and find a sword with a max of +5 attack, it can bring you up to 2 attack. If through potions or levelling, you raise your attack power to 2, this same sword would now grant you +1 over this (50% of 2) for a new total of 3 attack.
Where potions/books/other permanent stat raising items are concerned.. Just make them far, far rarer in my opinion. In the first game I played where my hero could move about quite a bit and I got several cities up, I'd encountered quite a large number of these stat increasing objects. I think 2-3 maximum over that gamespan would have been a better figure.
Then, for levelling up itself, to make it more exciting and rewarding feeling? In addition to the points allocated to the player to spend, apply a retroactive +5-20% bonus to current stats. I would suggest about 10% bonus. Apply it to the base stats, the derived stats can look after themselves as a result.
Also perhaps reduce the granularity over the stat control (at least on the level up interface, you can keep that level of detail in the background) and perhaps if necessary reduce the number of points allocated to spend. i.e., Instead of having 10 pts at level up that increase a stat by .1, maybe give 3-5 points but have them actually increase a stat by a whole 1.0 or at least a 0.5.
These sorts of changes would all, I think, make levelling up feel more like an achievement.
Key point that I think most important from that is reducing the granularity of stat increases. Make it so we increase stats if not by a full 1.0 then by at least 0.5 rather than the current 0.1, and reduce points allocated to us on level up as appropriate; balanced against also, I think, reducing speed of levelling in general.
Further to that though, an idea I thought of later - or rather, remembered later 
- would be something akin to Age of Wonder's system; whereby not only could you buy stats on levelling, but you could actually buy talents and abilities, or improvements on existing talents and abilities.
Some of them required hoarding points over a number of levels to purchase, but were such an accomplishment when you finally made it to them!
Currently; levelling is boring and has no real impact on the game. Potions/Books > Levels currently. So as mentioned in the quoted section, may want to look at reducing their availability (a LOT!) or perhaps by making the current 'bug' whereby the book/potion stats are lost on Sov death a 'feature' instead.
Definitely interested in hearing the thoughts of others on how levelling could be improved as well!
