A skill leveling system is based on:
1.Character levels are replaced by skill levels.
2.Skill levels are increased by skill-specific exp.
3.Exp for skills comes from successful use of skill.

1.More natural progression:intuitive to player.
2.Doesn't require to depend on items with +skills.
3.Can max out most skills in time.

1.Passive and support skills are hard or impossible to level.
2.Skill grinding is inflexible, giving only skill points to current skill, unlike char levels which give points to any skill you choose.
3.Forces to commit to very few skills which are at highest level.
4.Low diversity of builds: all skills will eventually get maxed.

Can be combined with floating point levels(storing current exp) to smoothly increase skill power by experience gained.