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Level-squatting just means not to take levels as you could!
...and to try to always keep your party at a the maximum sum of levels that the game rounds the average party level down!
On the one hand this makes the game a little bit harder as at least some PCs are on a lower level then they could be, on the other hand you get much more EXP this way and this allows at least a few PCs to have a higher level then they should have!
- every PC-build has levels that don't give a great benefit so it could make sense to squat them
- there are points in the game being easy enough to win with a lower party level
- and there are parts of the game that could give that much combat EXP (e.g. ice-tempel) that you should try to win on the lowest average party level possible! (it's quite a difference if a single golem gives 1000 EXP or 8000 EXP!)
Level-squatting is also a good strategy to avoid the EXP penalty:
if you have a male drow wiz 20 - rogue 3 for example and you want to give him 4 fighter levels at this point you would get an EXP if you would only take one fighter level. But if you squat and wait until you can take at least 2 levels you can avoid the penalty this way!
But beware if you take squatted levels:
- you always have to take all squatted levels available!
- and you have to take all squatted levels in one class!
...so always keep an eye on the EXP of your PCs that you don't have to take 6 fighter levels if you have planned to take only 4!!!
and especially if you have use extense level-squatting - if you take levels that increases your average party level by more then one level: save before levelling and then fight some typical enemies of that chapter to be sure that you still get enough exp! It's quite easy to get an average party level that results in getting no EXP from combat!!!
resumee: best concept by far - but if used extensively not that easy to manage!
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