What you ask in the topic title and what you comment on in the post are two different things.

In any case, to answer the question in the topic title:

I consider Wizardry 8's leveling system to be very good. Here are some of the things I like about it:

* Level ups are completely non-random, so no worry about having to reload if you get a bad level up.
* Levels and skills are decoupled in this game, except for the small amount of skill points gained at level up (which can't be used to raise a skill above 75 anyway; you need practice for that). Stat growth is not affected by skill growth, so you don't need to worry about raising the right skills before leveling up. The only possible issue is if you level up before raising your magic skills high enough to learn a new spell, but that isn't a serious issue because...
* You can simply choose not to level up. This is also good for controlling enemy level scaling; for example, if you have not yet left the Monastery, you can avoid leveling up to level 6, which is the level at which disease-causing enemies first spawn. (Disease can cause permanent harm to your characters if you don't cure it fast enough, and at this early stage, you don't have a way to cure it aside from purposefully letting the character die and reviving her.)

In any case, the leveling system is a lot better than the one in Morrowind/Oblivion, where you had to be careful about your skill gains if you want good stat growth.