If I am understanding the skill system right, it is divided into Points and Ranks. Points just add a straight up bonus for some calculations, probably +1 per point. For example, most spells get one additional point of damage for calculating the size of damage rolls. However, Ranks are different in that they add features like increasing duration or enabling continued stealth after attacking. I don't recall any actual ranks, so here is a non-existent example.
THE ULTIMATE WARRIOR!?!
Rank 1 - Gibbering (roll for a chance to cause confusion for each attack.)
Rank 2 - Ignorant Skin (roll for chance to confuse and poison for each attack.)
Rank 3 - Foke! (With every attack, have a chance to confuse, poison, and paralyze)
Rank 4 - Hoke Hogan! (Cause death, paralysis, confusion, and poison with all attacks.)
You probably got the idea now. Some skills like Eloquence probably change the multipliers instead of adding features. In the case of locks, I am certain that Rank imposes a limit on the effect of skill points, as my NG+ savefile had the thief start out with LV20 in Lockpick, but I couldn't open the chests in the Inn and Mayor's building until I achieved Student rank.
Post edited September 10, 2012 by Sabin_Stargem