My outlook on this may be a bit skewed. Though members have come and gone, I’ve been gaming with basically the same group since 1979. As such my experience may well be different from the typical gamer. When we first started playing RPGs XP was a big deal. When we leveled we gained new skills, new spells and in general were better able to kick ass. But even at the height of our focus on XP I don’t remember having any problems with the system such as were listed in the original post.
* Experience points are rewarded only for certain actions in game. this reinforces a certain play type.*
While this was true, it certainly didn’t discourage us from enjoying lots of different activities that didn’t directly award experience.
* The actual spending of Experience points (or levelling up, in many cases) interrupts game play.*
This was rarely an issue for us and generally only happened if someone forgot to level up between game sessions. And often that someone would choose to level up on the fly as we continued adventuring.
* Some settings are really not served by experience points.*
While this may be true, those settings usually don’t use XP to start with so that’s not been an issue for us either.
* As the game progresses (or sometimes, even at the start), the number of experience points awarded increases.*
As long as we wrote down how much XP the GM gave us this wasn’t an issue either, as the math itself certainly wasn’t a problem.
*in a game where XP are spent to improve your character, the costs are never really balanced, which will favour certain builds over others.*
As none of the games we played had the players attacking each other this hasn’t been an issue either. We always play as a group trying to achieve mutual goals. If one character was more powerful than another it really didn’t mater. In fact, we have sometimes piled as many magic items on a single tank like character as we could and used him as a battering ram. I’m sure it made the GM’s job harder, but it was a lot of fun. I think our GM regretted giving our party that minotaur NPC when we started giving him most of the magic items we found to toughen him up. *smiles*
For the last few campaigns, experience points haven’t really mattered. We played 3.5 D&D, Paizo’s beta D&D system and we are currently playing a Warhammer Fantasy RPG campaign. In all three games we’ve basically had fun with our characters and our GM has given us XP when he feels he needs to. This has worked out well for us and hasn’t really changed how we play. Just as before we have game sessions where one combat can take the entire night, sessions where combat dice are never rolled and more often than not we have a mixture of both. Experience points are useful for allowing our characters to progress, but they aren’t the focal point of our gaming.